This article first appeared in The Edge Financial Daily on September 15, 2017
KUALA LUMPUR: AirAsia Bhd has appointed BDO Unibank Inc, the Philippines’ largest bank by assets, to conduct preparatory work on the initial public offering (IPO) of Philippines AirAsia (PAA), a source close to the matter tells The Edge Financial Daily.
It was reported that the proposed IPO is expected to raise as much as US$200 million (RM841.1 million).
In October 2015, AirAsia pushed back the planned IPO to 2018 from 2016 as it tried to make PAA’s operations profitable. In June this year, however, AirAsia group chief executive officer Tan Sri Tony Fernandes revealed that PAA was planning to hold the IPO within the second half of 2017.
But on Monday, AirAsia said it was postponing plans for PAA to go public to 2018 from the second half of 2017 as it intends to further expand the business of its Philippine unit.
PAA commenced operations in 2012. In 2015, it completed a merger with Zest Airway, giving it access to valuable slots in the Philippines’ busiest airport, Ninoy Aquino International Airport.
PAA currently controls about 10% of the Philippine commercial aviation market, which is dominated by flag carrier Philippine Airlines and budget airline Cebu Pacific Air.
PAA’s IPO is in line with AirAsia Group’s plan to combine the units in the Philippines, Malaysia, Thailand and Indonesia under a single listed Asean holding company.
AirAsia has also proposed a back-door listing of its 49%-owned associate PT Indonesia AirAsia (IAA) in Indonesia by taking control of a Jakarta-listed transport and warehouse service provider with its local partner, PT Fersindo Nusaperkasa, which has a 51% stake in IAA.
On Aug 29, the group also announced plans to form a new holding company called AirAsia Group Bhd where its Malaysian operation, its five affiliates in the Philippines, India, Thailand, Indonesia and Japan, as well as its digital-related services and intellectual properties will be consolidated into five separate business segments.
The proposed internal reorganisation is expected to be completed by the first quarter of 2018.
AirAsia shares closed unchanged at RM3.41 yesterday, giving it a market capitalisation of RM11.46 billion.