The negative analyst report that sent AirAsia shares into a tailspin finally went into wide release Wednesday, alleging the budget airline needs to raise as much as $1.9 billion to pay down debt.
"AirAsia may be a new dog, so to speak, but it's playing a very old trick," GMT said in the report. The jibe is among a mixed bag of accusations contained in the report, which GMT distributed to clients on June 10, but withheld from the media until June 24.
It primarily accuses AirAsia of "milking" transactions with its money-losing associates in the Philippines and Indonesia, such as plane lease and maintenance deals, to boost the parent's operating cash flow.
Because the associates currently aren't able to pay their bills to the parent, "AirAsia is extending significant capital to them, essentially gearing up, funding its own profits and flattering its operating cash flows," the report said, alleging the carrier is close to default.
GMT, which calls itself an accounting research firm without a position on the shares, estimates AirAsia will need to raise as much as $1.9 billion via a recapitalization, potentially diluting existing shareholders by more than 100 percent. The parent company is owed around 2.8 billion ringgit ($750 million) by its Indonesian and Philippine associates.
GMT advises selling or shorting AirAsia stock, saying its fair value is 1.23 ringgit a share or less.
AirAsia hasn't responded to CNBC's requests for comment.
The stock has certainly reacted to GMT's report since the firm's claims began circulating; shares have dropped more than 26 percent since the beginning of June, at one point touching 1.43 ringgit, the lowest level since 2011. In midday trade Wednesday, the stock is down 1.8 percent at 1.61 ringgit.