Business

Published: Wednesday October 10, 2012 MYT 3:31:00 PM

AirAsia founders to kick off IPO spree in 2013


KUALA LUMPUR: The founders of Malaysia's AirAsia Bhd, Tan Sri Tony Fernandes and Datuk Kamarudin Meranun, are set to kick off an initial public offering spree in 2013 with three listings worth more than US$500mil.

The plan comes at a time when privatisation schemes and economic growth have cemented Malaysia's position as Asia's top destination for IPOs, accounting for US$7.9bil of the US$30.03bil worth of new listings in Asia-Pacific this year, according to Thomson Reuters data.

By comparison, IPOs in Hong Kong have raised US$1.81bil and those in Singapore have raised US$3.44bil so far this year.

Malaysia's Tune Group, a financial services-to-discount hotel conglomerate owned by Fernandes and Kamarudin, is expected to launch US$65mil IPO of its insurance arm, Tune Insurance, not later than the first quarter of 2013, according to two sources with direct knowledge of the deal.

"They are looking at a market capitalisation of US$260mil," one of the sources told Reuters on Wednesday, declining to be named as the matter is still private.

CIMB Group Holdings Bhd, ECM Libra Financial Group Bhd and RHB Capital Bhd are involved in the flotation, said the second source.

Fernandes and officials with Tune were not available to comment.

Meanwhile, AirAsia's long-haul arm, AirAsia X, recently hired CIMB, Malayan Banking Bhd and Credit Suisse Group AG for a US$250mil IPO expected early next year.

The group is looking to list its Indonesia operations, Indonesia AirAsia, by the first quarter of next year in a deal that could raise up to US$200mil.

The listing plans also come at a time when Fernandes is stepping down as the chief executive officer of the Malaysian-listed airline to focus on regional growth through Indonesia.

The group's plan to buy up to 100 Airbus jets, potentially worth around US$9bil, is designed to fuel the growth of what is becoming a cluster of related airlines under Fernandes, who placed a record order for Airbus jets last year.

With an operating fleet of more than 116 aircraft, AirAsia has ordered a total of 375 Airbus jets as part of dramatic expansion plans that include the acquisition of Indonesia's Batavia Air. AirAsia has said it will accelerate deliveries as rising demand helps it offset high fuel costs.

Not all analysts are convinced by AirAsia's expansion plans. Some local bankers say profits could be crimped by pressure from potential losses at start-up units in the Philippines and Japan and competition from new players such as Malaysia's Malindo Airways next year. AirAsia's shares have fallen 20.26 percent in the past three months.

AirAsia made a net operating profit of RM130.94mil(US$42.64mil), excluding one-off items, in the second quarter this year, down slightly from the same quarter last year. Net profit was boosted by a one-off gain of RM1.16bil following a share sale at its Thai unit. - Reuters

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