Home International AirAsia confirms securing $72 million Sabah Development Bank loan

AirAsia confirms securing $72 million Sabah Development Bank loan

 AirAsia Group Bhd says it has secured a RM300 million loan from Sabah Development Bank Bhd (SDB).

AirAsia, in a filing to Bursa Malaysia today, said the loan was not backed by a government guarantee.

This confirmed the New Straits Times report yesterday, quoting sources, that the group had secured a RM300 million loan from SDB to help keep it afloat amid the Covid-19 pandemic.

The report also quoted AirAsia Malaysia chief executive officer Riad Asmat as confirming that a loan had been approved and disbursed.

AirAsia said the loan was to bolster its presence in Sabah and pivot the airline into the digital business.

“This loan is in line with AirAsia’s pivot into the digital business. The main purpose of the loan is to enhance logistics in Sabah by increasing its supply chain and connectivity, creating over 100,000 new jobs in the process,” AirAsia said.

The fund would be used for specific development projects, the group added.

This included to establish OurFarm’s (AirAsia’s agriculture e-commerce platform) digital food supply chain and cold chain facilities in Sabah (allocation of RM170 million) and part finance a project to turn Kota Kinabalu International Airport into an international hub for AirAsia Bhd (RM110 million).

About RM10 million will be used to enhance e-commerce platforms and marketability of products from Sabah and another RM10 million to further promote the state’s tourism destinations on airasia.com, its digital super app.

Source: New Straits Times