AirAsia X to use 21% of IPO proceeds to finance new A330s

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AirAsia X intends to use 21.5% of the total gross proceeds of its planned initial public offering, scheduled for early next year, to fund the acquisition of new aircraft.

The Malaysian long-haul low-cost carrier operates a fleet of nine Airbus A330-300s and is scheduled to take delivery of 24 more of the type between 2013 and 2017.

AirAsia X expects to raise M$760 million ($248 million) from its IPO. It is offering 790.1 million shares - 685.7 million to institutional investors and 104.4 million to retail buyers.

AirAsia X says it will use 55.1% of the proceeds to repay bank borrowings within three months of the listing.

According to its prospectus, borrowing repayments include the refinancing of a Murabahah existing syndicated term financing from two lenders at 6.75% interest maturing at 19 September 2013. The facility is used for general and corporate working capital requirements. The outstanding amount totals M$36.3 million.

A M$48 million short term facility is used for aircraft deposits and matures at the end of December 2016. The interest rate is 4.95%.

AirAsia X also has a M$40 million Islamic short-term revolving credit facility for general and corporate working capital requirements maturing in December 2016. The annual interest rate is 6.48%.

Another M$100 million revolving credit facility used for fuel payments is at 4.95% and matures in September 2013.

AirAsia X will allocate 3.2% of the proceeds for listing expenses while the remaining 20.2% will be used for general working capital within 12 months of the IPO.

AirAsia X also has a firm order for 10 A350-900s with deliveries scheduled to begin in 2018.