Annual Report 2020

45. COVID-19 Pandemic The COVID-19 pandemic (“COVID-19”) has been declared a global health pandemic by the World Health Organization. COVID-19 has surfaced in nearly all regions of the world, which has driven the implementation of significant, government-imposed measures to prevent or reduce its spread, including travel restrictions, testing regimes, closing of borders, “stay at home” orders and business closures. In addition, the resurgence of COVID-19 cases in the respective countries have prompted the governments to impose domestic and international travel restrictions and these restrictions are hindering the recovery of demand for air travel. As a result, the Group has experienced an unprecedented decline in the demand for air travel, which resulted in a material deterioration in the Group’s revenues and cashflows, as well as impairment of financial and non-financial assets. The total impairment recorded in respect of these assets amounted to RM2,023 million (comprising impairment of aircraft-related property, plant and equipment and right-of-use assets of RM596 million and impairment of receivables, amounts due from associates and related parties, and investment in an associate of RM1,427 million), all of which are non-cash in nature. The Group reported a net loss of RM5,888 million for the financial year ended 31 December 2020 and the current liabilities exceeded its current assets by RM5,902 million as at 31 December 2020. In addition, the Group also reported a shareholders’ deficit of RM1,214 million. The Company reported a net loss of RM262 million for the financial year ended 31 December 2020. The aforementioned events and conditions indicate existence of material uncertainties that may cast significant doubt on the Group's and the Company’s ability to continue as a going concern. Arising from the COVID-19 pandemic, the Group and the Company have implemented several measures to weather through this current challenging time. These efforts are on-going as the Group and the Company continue to seek support from their vendors and business partners to address its cash flow requirements. The following measures had been taken, with further additional efforts to be taken: a) Funding To shore up liquidity, the Group has completed the following initiatives as of 31 December 2020: (i) Secured term loans and revolving credits of RM300 million secured from a financial institution; and (ii) Sale and leaseback of 7 engines which raised approximately RM400 million; and (iii) Disposed 33% equity interest in AAI which raised RM152.9 million. Subsequent to the financial year end, the Group has completed 2 tranches of private placements of 470.2 million ordinary shares in total, raising total proceeds of RM336.46 million. In addition to the above, the Group is currently undertaking the follow initiatives: (i) A pplication of funding under the Danajamin PRIHATIN Guarantee Scheme (“DPGS”) of amounts up to RM1 billion with the relevant financial institutions. As at the date of this report, the Group has received approval letters from certain banks amounting to RM300 million under the DPGS scheme. The Group is currently in various stages of discussion with other financial institutions to secure the remaining financing of up to RM700 million under the DPGS scheme. (ii) P roposed issuance of a debt instrument to raise approximately RM1 billion. 279 ANNUAL REPORT 2020