1. INTRODUCTION

The Board of Directors of Capital A Berhad  (“Capital A” or “Company”) wishes to announce that AirAsia RB 1 Ltd. [Company Registration Number LL20683] (“AARB1”), which is the wholly-owned special purpose vehicle of AirAsia Berhad [Company Registration Number 199301029930 (284669-W)] (“AAB”), which in turn is the wholly-owned subsidiary of Capital A, had on 21 August 2024 entered into the definitive agreements with aircraft lessors and private credit funds for the issuance by AARB1, of Regulation S secured notes of up to USD443.0 million, due September 2026 and August 2028, with AAB as a third party security provider, and both AAB and Capital A as corporate guarantors (“Revenue Bond”).

2. INFORMATION AND PURPOSE OF THE REVENUE BOND

The proceeds of the Revenue Bond shall be on-lend by AARB1 to AAB, for AAB to refinance its lease liabilities, aircraft and engine maintenance costs, and to support the working capital requirements of AAB.

The Revenue Bond is secured by, inter-alia, the following corporate guarantee(s) provided by Capital A and AAB respectively, and the security provided by AAB:

(i) a corporate guarantee from Capital A (which will only be valid until the internal reorganisation by Capital A as announced on 25 April 2024 and 26 July 2024 is completed);

(ii) a corporate guarantee from AAB, as the holding company of AARB1;

(iii) a first ranking charge by AAB over all present and future revenue proceeds generated by AAB from passenger seat sales and ancillary revenue from the selected specified routes after deduction of any refunds, merchant discount fees and bank charges which are held by AAB;

(iv) a floating charge by AAB over certain sub-accounts of AAB’s general operating account, which shall receive all present and future passenger seat sale proceeds and ancillary revenue generated by AAB through distribution channels other than AirAsia Move Sdn Bhd (formerly known as AirAsia SuperApp Sdn Bhd); and

(v) a first ranking share charge by AAB over 100% of the shares of AARB1 held,

all of which (save and except for item (i)) shall remain throughout the term of the Revenue Bond.

3. DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTEREST

None of the Directors and/or major shareholders of the Company and/or person connected with them have any interest, direct and/or indirect, in the Revenue Bond.

4. STATEMENT BY DIRECTORS

The Board of Directors of the Company having considered all aspects of the Revenue Bond, is in the opinion that the Revenue Bond is in the ordinary course of business and is in the best interest of the Group.

5. APPROVALS REQUIRED

The Revenue Bond is not subject to the approval of the shareholders.  Bank Negara Malaysia has vide its letters dated 26 March 2024 and 4 July 2024 approved the issuance of the Revenue Bond together with the proposed security under Bank Negara Malaysia’s Foreign Exchange Policy.

This announcement is dated 22 August 2024.