AirAsia, Capital A shares slide amid reports of possible govt intervention

KUALA LUMPUR, September 17 — Capital A Bhd and AirAsia Group Bhd saw their stocks plunge as rumors of possible government involvement in AirAsia’s domestic affairs circulated. By 4 pm, AirAsia's share price had dropped 13.5 sen, or 21.09 percent, to 50.5 sen, following a trading volume of 133.84 million shares. Meanwhile, Capital A’s share value decreased by 5 sen, or 18.18 percent, to 22.5 sen, with a traded volume of 118.57 million shares.

Reports emerged yesterday that growing worries about AirAsia’s financial struggles were prompting these share price declines. The low-cost airline is said to owe at least RM500 million to its airport operator, Malaysia Airport Holdings Bhd. According to a Bernama report, Batik Air's CEO, Datuk Chandran Rama Muthy, stated that AirAsia can swiftly acquire aircraft to fulfill or assist with domestic market demand, if necessary.

AirAsia had previously explained that its planned fundraising activities, which could reach US$1 billion (RM4.21 billion) in international debt markets and RM700 million in local credit facilities, were aimed at debt restructuring or refinancing and consolidating its balance sheet, rather than merely addressing operational shortfalls.