Author: Kai Wern Chan

AirAsia Thai Subsidiary To Undergo Restructuring Amidst $100.41mil Investment

Thai AirAsia, a subsidiary of Asia Aviation Public Company Ltd (AAV) under the low-cost airline AirAsia Group Bhd has approved its capital restructuring plan. The Thai unit of AirAsia will be seeing a $100.41 million (3.15billion baht) capital injection by an anonymous investor.

The Covid-19 pandemic has clearly incurred a great blow to the aviation industry since early 2020 last year. To sustain operations, AAV has mitigated the loss by allocating loans from new investors and offering initial public offering (IPO) to maximized the company’s liquidity.

As the main operating unit of Asia Aviation (AAV), Thai AirAsia has a 45% ownership control by AirAsia Group Bhd.

The investment will be provided in the form of a convertible loan agreement or an interest-free, convertible bond (zero-coupon bond). Investors can expect to gain stakes in Thai AirAsia by converting their loans or bonds to regular shares of $0.65 (20.3925 baht) per share once it has been offered in the IPO.

As AirAsia mentioned, “Once the conversion conditions occur, the status of the new investor will change from a creditor into a shareholder of Thai AirAsia.” They furthered that the anticipated date of completion for the whole process would be around mid-May of 2021 with the transaction completed in June.

As for the IPO, AirAsia said that the preparation should be taking more than seven months before it is up for offer.

AirAsia emphasized that various measures have been implemented to alleviate the effects of Covid-19 such as reduction of employee working hours. Yet, all efforts were unable to improve the group’s financial circumstances.

Although there have been several claims such as that by MIDF Amanah Investment Bank Bhd on the recovery of the aviation and air travel industry presuming to improve in 2021, it maintains a struggle as that travel restriction has not been fully lifted yet.

Other than the currently announced capital restructuring, AirAsia has yet to receive any monetary support from any financial institution or soft loans from the government.


India’s Trifecta Capital Launching US$200 Million Equity Fund for Late-stage Startups

India-based startup financing platform Trifecta Capital seeks to Launch a US$200 million venture capital for startups that are most likely pursuing an IPO in the next 1 to 3 years.

The firm will be launching one of its venture debt funds, the Trifecta Leaders Fund I, with approximately $15-30 million per investment through primary and secondary transactions.

The fund will hold a 5 years tenure, which provides a partnership opportunity for both domestic and foreign investors with India’s new and rising category leaders.

Trifecta Capital’s managing partner, Rahul Khanna, mentioned that they hope to build a portfolio of  8 to 10 category-leading companies for this investment.

Rahul Khanna added that the launch of Trifecta Leaders Fund I came from the realization of a structural gap in India’s late-stage venture capital ecosystem which sees an investment mainly sourced by investors outside of India.

Thus, the launch of this fund will become a lifecycle capital provider to India’s startup ecosystem.

Rahul clarified that the firm’s push into late-stage venture capital is certainly not an opportunistic play but a “strategic long-term extension of the Trifecta platform.”

For the fund’s management, Trifecta Capital elected former Goldman Sachs’ managing director, Lavanya Ashok, and Surbhi Garg, who previously tended in strategic investment at Reliance Jio, as the primary manager of the fund.

According to Lavanya, they have processed a list of over 20 companies and will be creating entry positions for the companies to solve issues for the founder.

Lavanya added, “These could be situations where the founders want to create liquidity for early-stage investors or there are Employee Stock Ownership Plan (ESOP) of people who have moved on.”

With the planning and decisions announced, current progress shows Trifecta Capital in the process of securing the Securities and Exchange Board (SEBI) approval and will begin its investment operations when approval has been regulated.

The Mumbai-based, Trifecta Capital has been known as the pioneer of India’s venture debt fund model when it first made its fund launch in 2014.

To date, the firm has invested in more than 70 companies across two venture debt funds, Trifecta Leaders Fund I and II, with a portfolio of 9 unicorns, 11 soon to be on their way.

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