AirAsia Thai IPO expected to raise RM500mil

PETALING JAYA: The listing of AirAsia Thai is expected to raise 5 billion baht (RM500mil) and will likely take place in Bangkok by early July this year, while the prospectus will be out in May, said sources close to the deal.

Tentatively, the shares will be priced at 5 baht (RM0.50) apiece.

It is learnt that investment bankers handling the deal are flying to Bangkok today to finalise details of the initial public offering (IPO) exercise. The listing was supposed to take place last year, but was delayed due to the flooding in Thailand in October.

AirAsia Thai is 51% owned by Asia Aviation Co and 49% owned by AirAsia Bhd.


Two air-hostesses giving traditional Thai greeting. AirAsia Thai, which is 51% owned by Asia Aviation Co of Thailand, is expected to be listed by early July. — AFP
Asia Aviation is a registered Thai company that bought into AirAsia Thai in 2006 from Shin Corp (associated with family interests of Thailand's then Prime Minister, Thaksin Shinawatra).

AirAsia Thai, which started operations in January 2004, was initially a joint venture between Shin Corp and AirAsia founder Tan Sri Tony Fernandes.

In 2006, when Singapore's Temasek bought into Shin Corp, AirAsia Thai's 51% national ownership requirement was diluted, thereby requiring an ownership change to ensure compliance. That was when Asia Aviation came in to buy the stake.

If the listing exercise takes place, it is likely that AirAsia's financial year ended Dec 31, 2012 (FY12), will start recognising revenue contributions from AirAsia Thai, something that analysts have generally yet to factor in.

Consensus estimates among analysts are for AirAsia to achieve net profit of RM977mil for FY12, and this has not factored in contributions from its associates.

AirAsia Thai has been operationally profitable since the second quarter of 2010, based on the notes to the accounts of AirAsia. However, AirAsia has not been able to recognise these profits due to accumulated losses of these units that have yet to be reversed to zero.

The share of profit will only be recognised in the income statement of AirAsia when a further RM30.4mil of unrecognised losses have been reversed.

AirAsia's share of AirAsia Thai's net profit in the fourth quarter to Dec 31, 2011 amounted to RM30.2mil, while for the full year, the net profit was RM99.3mil.