AirAsia aims to list holding company

SINGLE ECONOMIC VEHICLE: Low-cost carrier eyes bigger investor base

AIRASIA Bhd aims to undertake an initial public offering (IPO) of Asean Holding Co, a holding company that will house all the operations in the region, as the low-cost airline eyes bigger investor base.

Its group chief executive officer Tan Sri Tony Fernandes told CNBC there was tremendous interest in its stock, and work towards the IPO had started.

He said the listing of the Asean Holding Co would create a single economic vehicle which would allow analysts and investors to see the group as a whole and not just the Malaysian operation with one line of associates.

However, he said, the plan was to list AirAsia Indonesia and Philippines AirAsia first within the first half of next year before looking at Asean Holding Co.

“That would mean all Asean associates of AirAsia are listed. Then, we would like to take it a step further and create Asean Holding Co and allow us to be one economic vehicle,” Fernandes said yesterday.

He said there would be a lot of regulations to go through.

“There are lots of regulatory hurdles, but you know we have been always the first to try something and the initial response we got from leaders and regulators has been positive.”

On why he picked Hong Kong for the listing, he said the airline has received tremendous response from North Asia.

“Obviously China, Hong Kong, Taiwan and South Korea make up a large part of our business,” he said.

However, he said, whether the company put the whole holding company, it would be a separate question.

“But certainly a dual listing. We want to get a bigger investor base,” he said.

He also dismissed concerns that various listings would result in brand dilution, saying that it would only make the airline stronger.

On how realistic an Asean stock exchange plan was, Fernandes said he had always been supportive of it.

“I am not sure how long or how quick that is, but the Asean link (between stock exchanges) is kind of in action in terms of trading stocks in between various stock exchanges.”

Fernandes felt companies like AirAsia should drive such a plan.

“The enthusiasm I am getting from various stock exchanges is very good and we will push along. Our announcement of IPOs of Indonesia and Philippines (associates) is precipitating more dialogues on that front,” he said.

Meanwhile, Affin Hwang Capital equity research analyst Aaron Kee, in a separate interview with CNBC, said the listing of Asean Holding Co was a good idea and positive news flow for AirAsia Group as a whole.

“I think it is actually a good idea as currently the market does not spread any valuation to AirAsia’s associates because it is being consolidated as a single line item in the book,” he said.

However, he agreed that regulatory challenges would be massive as foreigners were not allowed to have a controlling shareholding over the associates.

“Hopefully positive outcome can be achieved by the second quarter of next year,” he said. Bernama