CHOI BETS BIG ON AIRASIA
Poker-playing HK financier confident aviation industry has bottomed out
WHEN Stanley Choi became one of AirAsia Group Bhd’s biggest shareholders a month ago, he did so with no intention to pursue the aggressive tactics favoured by activists in Europe and the United States.
Instead, he saw an opportunity to create a buzz.
Choi, a poker-playing financier, boosted his stake in the Malaysian low-cost carrier to almost nine per cent on Feb 18 in a private placement at a cost of about US$27 million.
He hadn’t previously been looking to invest in the travel industry.
“If I bet on Boeing or American Airlines, I probably wouldn’t be seen in any media,” said the 51year-old in an interview in his penthouse office, here. “With this kind of size, no big airline would pay any attention.”
The shares have surged more than 50 per cent since his stake purchase was made public.
Choi said he went into the investment without an exit strategy or an ideal return rate, and has yet to meet the two founders Tan Sri Tony Fernandes and Datuk Kamarudin Meranun in person.
He bought the shares about seven months after the firm’s auditor Ernst & Young said the carrier’s ability to continue as a going concern may be in “significant doubt”.
The statement triggered an 18 per cent plunge in AirAsia’s shares on the day.
“If it can survive, its stock price should be much higher than where it is now,” said Choi, who is chairman and founder of local brokerage Head & Shoulders Financial Group. “If it cannot survive, the rest of the aviation companies won’t be able to survive either. AirAsia will be one of the last groups to fall.”
Choi is used to playing the odds. He won more than HK$50 million as first prize in a super high-roller poker championship in Macau in 2012.
While he was initially sceptical of the investment in AirAsia, which he came across via “some common friends” in Malaysia, he said he was confident in the ability of Fernandes and Kamarudin as “world-class entrepreneurs” to lead the airline out of its difficulties.
“As long as they keep running and keep creating value for their passengers and clients, the market will reward us,” said Choi. “The aviation industry has bottomed out.”
A second private share placement saw billionaire David Bonderman and several partners of TPG Capital, the private equity firm he co-founded, emerge as shareholders, along with Aimia Inc, said AirAsia in a statement on Wednesday. Choi didn’t take part.