Airasia ... Nov 2008

AirAsia Bhd has secured financing totalling US$336 million (RM1.21 billion) for the purchase of up to eight Airbus 320-200 aircraft, in the first Islamic French-Malaysian lease agreement.

BNP Paribas and Natixis Transport Finance acted as the lead arrangers, global coordinators and book runners for the syariah-compliant French single investor Ijarah.
Landesbank Hessen-Thuringen Girozentrale, Irish Branch (Helaba) acted as mandated lead arranger, RHB Islamic Bank Bhd as arranger, and Bank Rakyat as mandated lead arranger of the commodity Murabaha. The banks were advised by Norton Rose together with Wong and Partners in Malaysia and AirAsia by Freshfields Bruckhaus Deringer.

CEO Datuk Kamarudin Meranun said it had secured the financing at a pricing that was “comparable” to its previous aircraft financing deals before the global financial crisis as it had locked in the deal when BNP Paribas and Natixis first arranged financing for the carrier.

Earlier this year (2008), Airasia decided that this year (2008) is the best time for Airasia to arrange financing for 2009 and 2010. They locked in the financing in 2005, so now (Nov 2008) there are just some minor adjustments.

This financing for AirAsia is very important for them for the next two years (2009-2010). It will be in a comfortable position. It ensures that it can take delivery of its aircraft. It is lease payment but it still have the ownership. So, Airasia are able to get capital allowance.

The Islamic Ijarah, above a cost-efficient 100% financing structure, ensured that AirAsia’s capital and investment allowances were preserved.

AirAsia had in several stages placed firm orders of a total of 175 A320 aircraft, with an option of 50 more. It has so far taken delivery of 53 A320s, of which 43 are for Malaysia’s operations, while eight and two are for Thai AirAsia and Indonesia AirAsia, respectively.


Tune Air Sdn Bhd is still in negotiations with financial institutions and prospective investors to fund the potential privatisation of AirAsia Bhd.

AirAsia said Tune Air was still negotiating the terms and conditions with the institutions and investors and would make an appropriate announcement when Tune Air had formed a firm intention on whether to proceed or not with the privatisation.

Tune Air was considering taking the carrier private at an indicative price of about RM1.35 per share, subject to change depending on the market conditions at the point of decision.

The options of how best to optimise and expand its operations were being developed and the privatisation option was subject to the availability of financing on acceptable terms from financial institutions and other potential investors, as well as conducive market and industry conditions.

BNP Paribas and Natixis Transport Finance have closed for AirAsia Bhd a US$336mil Sharia-compliant financing for up eight Airbus 320-200 aircraft.
BNP Paribas and Natixis Transport Finance are the lead arrangers, global coordinators and book runners for the financing.

This Sharia-compliant French Single Investor Ijarah is the first Islamic French-Malaysian optimised transaction of this kind. Above a cost efficient 100% financing structure, the Islamic Ijarah ensures that AirAsia’s capital and investment allowances are preserved.

Purchase of each aircraft is through a mix of euro-denominated equity, a US dollar denominated investment agency agreement – Wakala from Islamic financiers and a US dollar-denominated Wakala granted by AirAsia and refinanced by a ringgit denominated Commodity – Murabaha.