Starlux Airlines has filed for a cash capital increase of up to 300 million common shares, with the paperwork submitted on July 31 and the filing expected to become effective on Aug. 18. The company said the funds raised will be used mainly to repay bank loans and add to working capital. It is also planning a NT$2 billion domestic unsecured convertible bond issue to improve its financial structure.
Share sale and bond plan move together
The planned cash raise covers as many as 300 million new common shares. Starlux said earlier capital spending tied to new aircraft deliveries and route expansion, along with leasing costs, has led it to seek fresh funding that could reduce interest expenses and give it more flexibility in liquidity management.
Alongside the share sale, the airline is preparing a NT$2 billion domestic unsecured convertible bond, or CB, offering. The company said the combined financing approach is intended to strengthen its financial structure and support future long-haul route development as well as upcoming aircraft delivery plans.
Revenue growth lifted first-quarter profitability
Starlux said stronger passenger and cargo demand helped it return to profit on an operating basis in the first quarter of this year. First-half revenue reached NT$28.553 billion, up 30% from the same period a year earlier and the highest for the same period in the company’s history.
For the first quarter, total revenue came to NT$13.76 billion, up 23% year on year. Net profit after tax was NT$910 million, and earnings per share were NT$0.3. Passenger revenue in the quarter was NT$11.305 billion, up 17%, with an average load factor of 87%. Cargo revenue rose 28% to NT$1.18 billion, supported by shipping demand for electronic components and AI servers.
The company also recently won Air Cargo Week’s Asian Cargo Airline of the Year award. Starlux received the award just six years after launch and without a freighter fleet. Chief Executive Officer Chai Chien-hua said the result came mainly from global network deployment and precise cargo space management, with cargo volume rising 52% year on year and total cargo revenue increasing 53%.
Starlux expects to add five A350F freighters in 2028, a move the company said will significantly expand its global cargo capacity. It said it is pushing toward its goal of becoming “Asia’s most trusted and reassuring air cargo brand.”
Public underwriting portion set at 30 million shares
Of the 300 million shares in the planned capital increase, 80% — 240 million shares — will be offered to existing shareholders based on their holdings. Another 10%, or 30 million shares, will be reserved for employees. The remaining 10%, also 30 million shares, will be sold through public underwriting, equivalent to 30,000 lots.
The provisional issue price in the filing was NT$16.5 per share. Compared with a recent intraday market price of about NT$21.3, the spread is close to 30%, according to the article. It added that the 30,000 lots on offer could also provide a relatively favorable chance of allocation for subscription participants.
The final issue price, shareholder subscription record date, and subscription timetable have not yet been set. Those details will be decided by the company’s management and underwriters after the filing becomes effective, based on market conditions.