AirAsia sells rest of stake in online travel agency to Expedia for RM240m

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KUALA LUMPUR (Aug 14): AirAsia Group Bhd has disposed of its remaining 25% stake in online travel agency AAE Travel Pte Ltd to Expedia Inc for US$60 million (RM240 million) as part of plans to monetise its investment in the joint venture (JV) company and increase the budget airline's working capital.

The disposal will result in AirAsia realising a gain on disposal of RM230.4 million in the third quarter of 2018.

"The net assets and cash balance of AirAsia will increase by RM230.4 million and RM245.5 million respectively whereas total gain of RM181.6 million will be recognised at group consolidated level," it said in a filing with Bursa Malaysia today.

AirAsia said both its wholly-owned subsidiaries AirAsia Exp Pte Ltd and AirAsia Bhd had entered into a share purchase agreement with Expedia Southeast Asia Pte Ltd (Expedia SEA) and parent Expedia Inc to sell the airline's remaining 25% stake in AAE Travel, which operates a licensed online travel agency in Singapore.

The online travel agency carries three main brands namely AirAsiaGo, GoRooms and Expedia.

AAE Travel was formed as a 50:50 JV between Expedia SEA and AirAsia in March 2011. On March 10, 2015, AirAsia had divested 25% of AAE Travel shares to Expedia SEA.

In a separate statement today, AirAsia group chief executive officer (CEO) Tan Sri Tony Fernandes said the sale represents the divestment of the last of the airline's non-core investments from the previous round of JVs.

"These proceeds will be used to develop big unicorn products such as BigPay, Travel 360, Redbox Logistics and Ourshop.

This first set of JVs has taught us a tremendous amount and shareholders who have seen huge returns from our first round of partnerships haven't seen anything yet," he said.

Expedia Group president and CEO Mark Okerstrom said acquiring full ownership of AAE Travel reflects its belief in the immense potential for it in the over US$485 billion Asian travel market.

"This transaction unlocks better integration of our Brand Expedia Asia business into our core global travel platform, giving us even greater confidence in our ability to harness the huge growth potential that Asia represents," he added.

AirAsia shares closed down 4 sen or 1.18% at RM3.35 today, with 9.99 million shares traded, bringing a market capitalisation of RM11.1 billion.