KUALA LUMPUR, April 28 — MIDF Amanah Investment Bank Bhd has reiterated its ‘sell’ call on AirAsia Group Bhd (AAGB) amid a restructuring plan for Thai AirAsia.

AAGB holds a 45 per cent stake in Thai AirAsia via AirAsia Investment, a wholly-owned subsidiary of the group.

In a research note today, MIDF said although recovery for the aviation sector and air travel is expected to gradually take place in 2021, it remains an uphill battle, given that travel restrictions have not been fully lifted.

"Key risks to our call include faster-than-expected travel demand recovery, worsening pandemic, stricter movement controls order imposed on air travels, and a further round of equity fundraising,” the research firm said.

The restructuring proposal includes an initial public offering (IPO) of Thai AirAsia, conversion of debt to equity and an investor loan in the form of a convertible bond, as well as shares offering to parent company Asia Aviation PCL’s current executive chairman.

"Based on the details disclosed, we estimate the IPO proceeds potentially reaching RM358.43 million with the additional convertible bond issue to be in the maximum amount of RM409.5 million,” it said.

MIDF maintains AAGB’s target price at 21 sen per share at this juncture as the firm tracks the progress of the fundraising exercise.

At 1.30pm, AAGB shares were traded at 90.5 sen with 18.76 million shares changing hands. — Bernama