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the mgmt/insiders will have visibility of their earnings trend in coming qtrs. I believed a mixture of scr ( to reduce the share capital so that shareholder fund > 25% of share capital) and fund raising (to increase equity and cover for upcoming losses; keep the shareholders fund > 40mil) will be needed to pull the leg out from PN17
Of course when latest QR showing current liabilities of RM18 billion (trade/other payables at ~ RM10 billion) plus the protracted Middle East conflicts !
1HFY26 losses is at 682mil. Assuming same rate for 2HFY26, the current shareholders' funds of 483mil as of end of June will be wiped off and becomes negative. fund raising of the same scale of losses will be needed. amount of fund raising will be doubled if same scale of losses is anticipated in 1HFY27.
Share price was RM2.27 early this year (28 January 2026). Almost 70% wiped off based on current market closing price of 71.5 Sen today :-| That is why it is very important to track and monitor all ratios (liquidity, leverage, efficiency, profitability and market value) closely.
AA bought for RM1 in 2001. Will it now need to be sold for RM1 to “new owners” to facilitate proper and complete restructuring especially the huge current liabilities ?
If government had asked other local airlines to potentially absorb the cash-strapped carrier’s domestic market share, that is their most profitable routes. Also, these profitable routes revenues are most likely already pledged for their private creditors.
the only way to stay out from PN17 will be to have SCR + funding. and that means continue to pile up debt. vicious cycle. gomen should not bail out aagb.
At this juncture, debt funding is way too expensive as even if available, private credit likely to be in double digits % and with very strict collateral terms. Cash to revenue ratio will be really ugly based on steep margin compression (or loss position) from current high jet fuel prices (averaging US$191) & capacity reductions.
As global average jet fuel price last week rose 1.0% compared to the week before to $187.34/bbl as at 2 October 2026, Q4 2026 and cash flows will be very tough despite Q4 being the usual aviation peak end of the year travelling season. Brent crude oil price range still elevated > US$100 !
scr + funding is the only way to stay out of pn17. Boss can say anything but when news of gomen is involved, and Bloomberg news on negotiation with Ares and Indies which the boss has denied are out there - the probability of Airasia in liquidity crunch is real and the survival depends on (1) fuel price whereby @panorama has mentioned above (2) funding/financing, how much and how fast can it secure the funding (3) how many new shares will be issued - rights issue/fundraising/dilution
With CURRENT LIABILITIES at > RM18 BILLION plus as at 30 June 2026, AA will need to raise massive funds urgently via guarantees given by government or Substantial Shareholders before end of QR4/AFS ended 31/12/2026 OR rights issue/placement of shares to see through current liquidity crisis (high trade payables position) as mentioned by Cheng above.
When airport charges and jet fuel supplies require government assistance for GLCs to increase and extend more credit terms, the cash crunch is real. Government will require founder and substantial shareholders to give personal guarantees though.
funding here includes refinancing. at risk of margin call if the bosses (Tony & Kamarudin) fail to get financing deals soon? look at the top 30 shareholders in AR2025 as of 31 Mar 2026. both bosses and their investment vehicle holding ~1bil shares and almost half of it are pledged shares.
That’s why they are looking at Corporate Exercises at Tune Protect (divestment) and CapA now but valuation low at this juncture based on AA predicament (inter-linked and reliance on AA business). Highly indebted companies all facing the same headache based on rising global borrowing yields and risks aspects.
aagb is not backed by assets as almost everything is leased :) there is no list of properties held either. keep flying and keep refinancing is the only way to survive?
market is just waiting for financing news; swing low triggering margin calls if aagb fails to secure financing or swing high if aagb successfully secures financing deals.
