AirAsia says $72 million loan was obtained in appropriate manner

AirAsia Group Bhd said on Friday a $72-million loan the budget airline has secured was completed in accordance with laws, policies and procedures.

Earlier this week, the Malaysian Anti-Corruption Commission said it had begun an investigation into the loan made to AirAsia by Sabah Development Bank Bhd (SDB), a bank wholly-owned by the Sabah state government.

The airline said in a stock exchange filing that “all discussions and negotiations with SDB and its officials were all conducted in an appropriate manner, on an arm’s length basis.” The airline said that the loan application took five months to complete.

More than half the loan amount was to establish and operate a digital food supply chain and cold chain facilities in Sabah. More than a third was to finance expansion plans to transform the state’s capital city into an international hub for AirAsia’s passenger and logistics operations.

“Besides their strategic values, the components of these projects also provide solid commercial basis and merits as reflected in the terms and conditions imposed upon AirAsia,” the airline said.