AirAsia X: is the rights issue enough? (4)

I wrote before about the upcoming rights issue of AirAsia X and asked the question if the money (RM 395 Million) is enough:


"The company has been bleeding lots of money (if one takes out one-off items and does not take deferred taxation into account, then AirAsia X lost money in every single year of its existence). Also, the company has large capital commitments."


AirAsia X announced its third quarterly results, and the loss for the year increased further to RM 562 Million, much larger than the recently completed rights issue.

On one side a large part of the losses (RM 357 Million) is due to foreign exchange losses, due to the weak Ringgit.

On the other hand, the company spend RM 371 Million less on fuel, due to the softening of the oil price.

Its shareholder equity is RM 503 Million, about equal to its deferred tax assets (RM 470 Million), which should (in my opinion) not be counted as an asset. In other words, without the deferred tax assets the shareholder equity would be very close to zero.

It looks like the company needs a huge injection of fresh capital, but another rights issue, so soon after its previous one, might be hard to digest for the minority shareholders.