23 October 2020, Friday | 10:37am

AirAsia gets RM1b loan under Danajamin

2020-10-13

AIRASIA Group Bhd has secured an RM1 billion loan that would help the airline survive the Covid-19 crisis.

The budget carrier has received the financing from a group of local banks under the RM50 billion Danajamin Prihatin Guarantee Scheme (DPGS), according to a report by Nikkei Asia.

The loan was said to be 80%-guaranteed by the Finance Ministry, the report said, quoting sources at the ministry and AirAsia.

A source said disbursement of the financing is expected next month.

Danajamin Nasional Bhd, the country’s first financial guarantee insurer, provides the DPGS as part of the Prihatin Economic Stimulus Package that was introduced by Prime Minister Tan Sri Muhyiddin Yassin.

The facility is available through all financial institutions until Dec 31, 2020, or until the fund is fully utilised.

Meanwhile, Nikkei Asia also quoted another source who said AirAsia is looking at another round of job cuts next month involving over 400 employees.

Today, the Finance Ministry has clarified that it has not provided any financing nor guarantee to any airline. It had issued the statement to refute media reports about it providing or guaranteeing such financing.

 

 

The question of funding has been touchy as the government has stated that it would not bail out any airline.

AirAsia X Bhd is also in dire need of massive debt forgiveness from its creditors, or be prepared to shut its business down for good.

The low-cost, medium-haul airline, which has grounded all its flights due to the Covid-19 outbreak, is asking creditors and suppliers to forgo over RM63bil in liability and instead accept a maximum RM200mil in payment.

 

 

 

 

 

Source: The Malaysian Reserve                  https://bit.ly/2Ifkbd1

Photo: investing.com

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