Malaysia's AirAsia secures US$72 million loan from Sabah Development Bank

Malaysia's AirAsia secures US$72 million loan from Sabah Development Bank

AirAsia KLIA (1)
An AirAsia staff wears a face shield, mask and gloves at the check-in counter at the Kuala Lumpur International Airport 2 in Sepang, Malaysia on Apr 29, 2020. (Photo: AFP/Mohd Rasfan)

KUALA LUMPUR: Malaysia's AirAsia Group has approved and disbursed a RM300 million (US$72 million) loan from Sabah Development Bank to its units as part of the group's fundraising efforts, the budget airline said in a bourse filing on Friday (Oct 23).

The airline said the loan was not backed by a government guarantee, which the group has been seeking for a portion of the loans it hopes to secure.

AirAsia has been looking to raise as much as RM2.5 billion by the end of the year, RM1.5 billion of which could be in bank loans.

READ: Malaysia's AirAsia X seeks to stave off liquidation with US$15 billion debt restructuring

AirAsia said the loan was to fund specific development projects as agreed by the airline and the bank, including RM170 million to establish and operate a digital food supply chain and cold chain facilities in the state of Sabah.

The rest will part-finance a project to turn the capital city airport into an international hub for AirAsia's operations, enhance e-commerce platforms and marketability of Sabah products and promote tourism destinations on AirAsia's platform.

"The main purpose of the loan is to enhance logistics in Sabah by increasing its supply chain and connectivity, creating over 100,000 new jobs in the process," it said.

Source: Reuters/dv