AirAsia Indonesia Evaluates Recapitalization to End Share Suspension

AirAsia Indonesia is evaluating several recapitalization options to strengthen its capital structure and comply with exchange requirements. The airline's shares were suspended in early July after the company reported negative equity.

According to a Wednesday filing, the company is considering a rights issue, a private placement, or the conversion of trade payables and lease liabilities owed to shareholders and controlling entities into perpetual instruments that count as equity. These efforts to stabilize the Indonesian operation occur amid a broader funding crisis at the parent company, AirAsia Aviation Group Ltd, which reported record debt of US$4.1 billion as of June and is seeking US$1 billion in refinancing.

Tony Fernandes, co-founder and adviser to the group, previously stated that fresh capital would be injected into the Indonesian and Philippine operations. He expects new shareholders to join these affiliates as part of the restructuring process.