AirAsia Bhd CEO Tony Fernandes said today the company will recapitalise its Indonesian affiliate so that the unit can meet a rule set by the country’s Transport Ministry.

AirAsia Indonesia has submitted a plan to boost shareholders’ equity ahead of a month-end deadline, Fernandes said at a company event in Kuala Lumpur.

“We’ve always said that we’re re-capitalizing the airline and we will. There’s not a second of worry that AirAsia Indonesia will close down because of equity regulations,” he said.

Concerns that the unit would be grounded by Indonesia’s Transport Ministry if it did not reverse a deficit in shareholder funds had sent shares in AirAsia tumbling more than 15 percent earlier this month.

The ministry later softened it stance to say it would “help and support” airlines to improve their finances.

- Reuters