AirAsia X Bhd and Nok Airlines Co said they will sell shares in initial public offerings to fund expansion plans as economic growth in Asia spurs travel demand.
AirAsia X, the long-haul arm of Asia's biggest budget carrier AirAsia Bhd, plans to raise as much as $370 million through an offering in Malaysia, according to the term sheet obtained by Bloomberg News. Nok Air, a budget carrier controlled by Thai Airways International Pcl, plans to collect 3.25 billion baht ($106 million) from its IPO, the company said.
Budget airlines in Southeast Asia ordered at least 1,000 new aircraft in the past five years as economic expansion across the region enables more people to start flying in countries such as Indonesia, Thailand and Vietnam. Some 15 low-fare carriers started flying in the past decade across Asia-Pacific, the most profitable region worldwide for at least the fourth consecutive year, according to the International Air Transport Association.
"The growing number of middle class with the economic growth in this region will help increase Asian travel demand," said Siyi Lim, an analyst at OCBC Investment Research in Singapore. "The budget carriers will benefit more on this because there's still a lot of people who haven't flown before."
Institutional investors can bid for AirAsia X, based in Sepang, Malaysia, at a range of 1.15 ringgit to 1.45 ringgit apiece, according to the term sheet. The carrier can raise up to $426 million if it exercises its greenshoe option. The price for individual investors was set at 1.45 ringgit, according to the prospectus filed in the Star newspaper today.
AirAsia X
Proceeds from the IPO will help repay bank borrowings and set up new hubs, the carrier said.
The airline is offering 10.6 per cent of its capital to individual investors and 14.4 per cent to institutions, according to the prospectus. The final sale price for individuals may change if the institutional price is lower, it said. The offer for institutional investors closes on June 24 and the listing will be on July 10.
"We have an early mover advantage in the low-cost, long-haul segment globally, which is poised for substantial growth in coming years," AirAsia X said in its prospectus. "We believe we have the lowest unit operating cost base of any airline in the world."
AirAsia gained 0.6 per cent to close at 3.35 ringgit in Kuala Lumpur trading.
This is the second of the three proposed listings by affiliates of AirAsia as the group raises funds to accelerate expansion. In December, the airline ordered 100 Airbus A320s valued at $9.4 billion, in addition to the 200 it had agreed in 2011 to purchase.
The carrier is also adding a unit in India through a venture with Tata Group.
Orix, Manara
CIMB Group Holdings Bhd, Malayan Banking Bhd, Credit Suisse Group AG and Morgan Stanley are joint global coordinators for the offering. Barclays Plc, BNP Paribas SA, Citigroup Inc, CLSA Ltd. and HSBC Holdings Plc are helping manage the offering.
Aero Ventures Sdn, owned by AirAsia Group CEO Tony Fernandes and three others, will cut its stake in the airline to 34.4 per cent from 52.2 per cent through the IPO. Japan's Orix Airline Holdings Ltd and Bahrain's Manara Consortium will each reduce their holdings to 6.4 per cent from 10.9 per cent after the share sale, according to a prospectus filing with the Kuala Lumpur stock exchange today. AirAsia Bhd won't be cutting its interest.
Nok Air will sell 187.5 million shares, including those owned by Aviation Investment International Ltd, at 26 baht apiece in the offering and expects to start trading on the stock exchange on June 20.
ANA considers ending AirAsia tie-up on Japan discount carrier
ANA Holdings Inc, which owns a majority stake in a Japanese discount carrier set up in partnership with AirAsia Bhd, said it is considering dissolving the tie-up as it aims to improve sales at the unit.
Ending the partnership in the venture, AirAsia Japan Co, is one option and no final decision has been made, Megumi Tezuka, a spokeswoman for Tokyo-based ANA, said by phone today. AirAsia Group chief Executive Officer Tony Fernandes said by email that he would comment "in due course".
ANA would continue operating the business as a low-cost carrier from Narita airport even if the partnership with AirAsia is dissolved, Tezuka said. AirAsia Japan has struggled to fill as many seats as low-cost carriers Peach Aviation Ltd, partly owned by ANA, and Jetstar Japan Co, which also began flights in Japan last year.
The Nikkei newspaper reported earlier today that ANA will acquire AirAsia's stake in AirAsia Japan, without saying where it got the information.
