This article first appeared in The Edge Financial Daily, on February 4, 2016.

KUALA LUMPUR: AirAsia Bhd is upping its stake in Think BIG Digital Sdn Bhd to 71.9% from 46.1%, after acquiring a 25.8% stake from its affiliate Tune Money International Sdn Bhd (TMI) for RM101.5 million, or RM49 per share.

In a bourse filing, AirAsia said it had entered into a share sale agreement with TMI to acquire the stake. The deal, to be internally funded, will make Think BIG its subsidiary and improve its top line.

“[Think BIG has a] high return on investment, as it has a business plan to grow its loyalty business and membership base significantly,” it said, adding that the higher stake in Think BIG would accord it greater control over the operations of Think BIG, the owner and operator of AirAsia’s BIG loyalty programme. 

The deal is a related-party transaction, as two of TMI’s shareholders and directors, Tan Sri Anthony Fernandes and Datuk Kamarudin Meranun, who is also AirAsia executive chairman, are shareholders and directors of AirAsia. Both hold a 35% stake each in TMI and a 19% indirect stake each in AirAsia. Aimia Holdings UK II Ltd holds a 17% stake in Think BIG. With the stake sale, TMI’s stake in Think Big will be reduced to 11.1% from 36.9%.

The transaction is expected to contribute to AirAsia’s earnings and cash flow in future, but have no effect on its audited consolidated net asset per share or consolidated gearing for the financial year ending Dec 31, 2016. AirAsia will also not be assuming any of Think BIG’s liabilities.