AirAsia X shares fall 9.5% on rights issue plan

Shares in AirAsia’s long-haul unit fell as much as 9.5% Tuesday in response to a RM500m ($123m) rights and share issuance plan as the struggling Malaysian carrier tries to win creditor backing for a proposed debt restructuring. The tumble in AirAsia X’s stock came after the airline on Monday night proposed a rights issue of up to RM300m and an issuance of new shares via a special purpose vehicle of up to RM200m. The company said the plan was a “critical component” of the RM63.5b debt restructuring that is a last-ditch attempt to save its business. But the arrangement is subject to the approval of the Malaysian bourse and AirAsia X shareholders at an upcoming extraordinary general meeting. AirAsia X’s deputy chairman said in October that the carrier had run out of money and was liquidating its Indonesia business as well as writing down its 49% stake in Thai AirAsia X. That same month the airline, whose shares have fallen 39% this year, warned of “an imminent default of contractual commitments [that] will precipitate a potential liquidation of the airline” barring restructuring. On Monday, AirAsia X also said it was seeking to further shrink its issued share capital by 99.9% in response to “representations made by certain creditors”. It had previously proposed a reduction by 90%.<br/>