Airasia Plans IPO Of ASEAN Holding Co, Eyes Bigger Investor Base
November 25, 2016 15:05 PM
Tan Sri Tony Fernandes - file picture
KUALA LUMPUR, Nov 25 (Bernama) -- AirAsia Bhd aims to undertake an initial public offering (IPO) of its ASEAN Holding Co, which will consist of all the operations in the region as the low-cost airline eyes bigger investor base.
Its Group Chief Executive Officer, Tan Sri Tony Fernandes, told CNBC there were tremendous interests in its stock and work towards the IPO has started.
He said the listing of the ASEAN Holding Co will create a single economic vehicle which will allow analysts and investors to see the group as a whole and not just the Malaysian operation with one line of associates.
However, he said, the plan was to list AirAsia Indonesia and Philippines first within the first half of next year before looking at ASEAN Holding Co to be listed.
"That would be mean all ASEAN associates of AirAsia are listed. Then, we would like to take it a step further and create ASEAN Holding Co and allow us to be one economic vehicle," Fernandes told the news channel earlier today.
He said there would a lot of regulations to go through.
"Lots of regulatory hurdles but you know we have been always the first to try something and initial response we got from leaders and regulators has been positive," he said.
On why he picked Hong Kong for the listing, he said, the airline has received tremendous response from North Asia.
"Obviously China, Hong Kong, China Taiwan and South Korea make up a large part of our business. We had tremendous investor interest in our stock," he said.
However, he said, whether the company put the whole holding company, it would be a separate question.
"But certainly a dual listing. We want to get a bigger investor base," he said.
He also dismissed concerns that various listings would result in the brand dilution, saying that it would only make the airline stronger.
On how realistic a ASEAN Stock Exchange plan was, Fernandes said, he has always been supportive of it.
"But I am not sure how long or how quick that is but the ASEAN link (between stock exchanges) is kind of in action in terms of trading stocks in between various stock exchanges," he said.
Fernandes felt companies like AirAsia should drive such a plan.
"The enthusiasm I am getting from various stock exchanges is very good and we will push along. Our announcement of IPOs of Indonesia and Philippines (associates) is precipitating more dialogues on that front," he said.
Meanwhile, Affin Hwang Capital, Equity Research Analyst, Aaron Kee, in a separate interview with CNBC, said the listing of ASEAN Holding Co was a good idea and positive news flow for AirAsia Group as a whole.
"I think it is actually a good idea as currently, the market does not spread any valuation to AirAsia's associates because it is being consolidated as a single line item in the book," he said.
However, he agreed that regulatory challenges would be massive as foreigners were not allowed to have a controlling shareholding over the associates.
"Hopefully positive outcome can be achieved by the second quarter of next year and we will have more clarity," he said.
Asked on the valuation of the IPO, Kee said, although it was too preliminary to speculate, it could fetch up to US$500 million (RM2.23 billion).