Saudi Arabia’s sovereign wealth fund is set to invest $100 million in Malaysia’s Capital A-owned budget airline AirAsia, Bloomberg News reported on Thursday, citing people familiar with the matter.
The Middle East investment forms the majority of AirAsia’s about 1 billion ringgit ($225.99 million) fundraising target, with the firm also in discussions with potential investors from Singapore and Japan, the media report added.
The report, citing a person familiar with the matter, said the Malaysian airline is raising funds and offering investors up to a 15% stake at a $2 billion valuation, as it looks to target growth after pandemic-induced losses.
The parent firm expects to record a profit this year after a loss in 2024 when it recorded a one-off charge in its aviation business.
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Capital A is also offloading the budget carrier to long-haul unit AirAsia X Bhd to consolidate the operations under a single AirAsia brand.
Asian airlines in general faced a challenging year in 2024 with supply chain problems disrupting operations and exposing them to strengthening consumer protection rules, according to industry executives.
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