AirAsia X Plans IPO in June 2013

[flee 5]

SEPANG: Long-haul budget carrier AirAsia X Sdn Bhd is planning an initial public offering (IPO) in the second half of 2011, subject to market conditions.

 

However, where it will be listed and the size of the IPO have not been determined.

 

AirAsia Bhd group chief executive officer Datuk Seri Tony Fernandes said AirAsia X would restructure itself to become a stand-alone airline.

 

“There have been talks on whether AirAsia X will be merged with AirAsia. We studied the best scenario and decided to let AirAsia X become a stand-alone company and be more focused on its business.

 

“This move will allow both AirAsia and AirAsia X to pursue a clearer and more focused business strategy,” he said at a briefing here yesterday.

 

Under the restructuring, AirAsia X will take over employment of its own pilots, cabin crew and ground staff.

 

The announcement is expected to alleviate AirAsia’s concerns that the company is funding the growth of the privately-owned AirAsia X.

 

Fernandes said investors were concerned over speculation that AirAsia and AirAsia X would be merged and wanted to make it clear that AirAsia would not be funding AirAsia X.

 

“There has been an overhang on AirAsia and whether it is going to take on the financing of the aggressive expansion of AirAsia X. AirAsia will not be funding AirAsia X. It will be funded separately though an IPO,” he said.

 

AirAsia X chief executive officer Azran Osman Rani said an airline required capital to grow, hence it needed to raise money instead of remaining as a private entity. He said funds raised from the IPO would be used to fund its fleet expansion.

 

Fernandes said the carrier was “starting the process” and there was not much detail yet.

 

AirAsia X has yet to appoint any advisors or investment bankers.

 

“We need to delivery profits this year to show investors our track record,” Azran said, adding that AirAsia X started at end-2007.

 

AirAsia X posted revenues of RM720mil and RM231mil for the financial year ended Dec 31, 2009 and 2008 respectively. Net profit last year was RM87mil and the airline is targeting a net profit margin of some 7% this year.

 

Azran said the carrier intended to double its revenue this year and was hopeful of hitting RM2bil in 2011.

 

AirAsia X has recently completed its RM100mil rights issue to reduce its debt. Its gearing stands at 260% currently.

 

Fernandes said AirAsia would still support AirAsia X and might profit-share on some routes although AirAsia would focus on destinations below four hours of flight time.

 

Azran said AirAsia X had received approval from authorities to fly to Tokyo but was still awaiting approval from Japanese authorities.

 

He added that the airline was evaluating the possibility of flying to a destination in continental Europe early next year as well as restarting some Middle East routes.

 

Asked when AirAsia would begin to fly to the United States, Azran said: “I don’t think US market is realistic this year but next year maybe.”

 

Fernandes said AirAsia X and AirAsia combined could eventually be as large as Singapore Airlines.

 

“If you look at Cathay Pacific and Singapore Airlines, they do not have the connections that AirAsia provides (to AirAsia X),” he said.

 

AirAsia X currently operates a fleet of eight aircraft – six A330s and 2 A430s. It will be taking delivery of three more A330s by the end of the year. It has also ordered 17 more A330s and 10 A350s to be delivered from next year till 2020.

 

Fernandes said AirAsia’s gearing was necessary to fund expansion. AirAsia has a net gearing ratio of 2.25 and is looking to slow down aircraft delivery to maintain its gearing level and transfer the debts of its Thai and Indonesian operations back to the respective countries.

 

“If I had listened to analysts and had five planes a year, Tiger (Airways) would crush us by now. But now, I can slow down our growth because we have reached a size where no one can touch us,” he said.

 

While AirAsia X is pursuing the strategy of becoming a stand-alone airline, it will continue to use the AirAsia brand as part of its 30-year brand licence agreement and the airasia.com website for a single ticketing of AirAsia and AirAsia X.

 

Meanwhile, AirAsia X is offering free seats to all its destinations for the first time. The free seats offer is in commemoration of AirAsia X’s move into its next growth phase with 2 million guests carried to date since its inception in November 2007.

 

The booking period is for today (June 9) and tomorrow for the travel period from Oct 11 until Nov 14 this year.

 

An aviation analyst from a local brokerage said it was good to hear that AirAsia would not fund AirAsia X’s expansion at its own expense.

 

“However, it is too early now to come out with the fair value for AirAsia X. We just have to wait for further announcement,” he said.

 

Another industry analyst agreed that it was good to know AirAsia X expansion was going to be via the market but he said more details were needed for valuation.

 

“We do not know the exact shareholding structure apart from the 15% held by its parent company with the option to increase. We also do not know the percentage of its shares to be floated but we do anticipate great news from this IPO if it materialised,” he said, adding that the current financial result for AirAsia X also remained to be seen.

 

Source: http://biz.thestar.com.my/news/story.asp?file=/2010/6/9/business/6427192&sec=business

[Pieter C. 5]

AirAsia X Plans IPO Next Year - Report

 

June 9, 2010

 

Malaysian budget long-haul carrier AirAsia X plans to launch an initial public offering in the second half of 2011 to tap public funds for growth, a newspaper reported on Wednesday.

 

Such a move will ease investor concerns that AirAsia X's rising capital requirements could weigh on major shareholder AirAsia, Asia's biggest budget carrier by fleet size, said AirAsia chief executive Tony Fernandes.

 

"AirAsia would not fund AirAsia X anymore," Fernandes was quoted by the Edge Financial Daily as saying.

 

AirAsia X "would seek funding primarily from the IPO exercise," he said.

 

AirAsia, which focuses on the short-haul business, owns 16 percent of AirAsia X.

 

AirAsia X's other shareholders include billionaire Richard Branson's Virgin Group and Japan's Orix Group.

 

AirAsia X, which was launched in 2007, reported a net profit of MYR87 million ringgit (USD$26.16 million) in 2009 on revenue of MYR720 million.

 

(Reuters)

[flee 5]

AirAsia X may list in HK or US

 

Shareholders will need to be consulted first

 

PETALING JAYA: AirAsia X Sdn Bhd (AAX) is considering the possibility of listing on the Hong Kong or New York stock exchange, which are options being proposed by a couple of foreign investment banks pitching to secure the mandate for the long haul budget carrier’s initial public offering (IPO).

 

Even so, no decision has been made on the listing venue of the IPO, which is being targeted for the second half of next year. “All the shareholders will need to be consulted on this issue, which has yet to be raised at board level. But the current foreign shareholders in AAX may be more inclined towards an overseas listing,” said a source close to the exercise.

 

AirAsia X, which began its operations in November 2007, is 48% owned by parent company Aero Ventures Sdn Bhd (owned by Datuk Seri Tony Fernandes, Datuk Kamarudin Meranun, Datuk Seri Kalimullah Hassan, Lim Kian Onn and former Air Canada chairman and CEO Robert Milton) while Richard Branson’s Virgin Group and AirAsia Bhd each has a 16% stake in the carrier. Japan’s Orix Group and Bahrain-based Manara Consortium each owns 10% in AAX.

 

The IPO, said a source, is likely to value AAX at between US$500mil and US$600mil.

 

It is believed that several foreign investment banks, namely Goldman Sachs, Credit Suisse and Royal Bank of Scotland have been lobbying to get the IPO mandate, but none – local nor foreign advisers – has been appointed yet. The front runners, however, are said to be Goldman Sachs and Credit Suisse. One of the foreign investment banks, it is believed, had submitted a “constructive proposal” on a potential listing on a foreign exchange.

 

“Several reasons support their recommendation for AAX to list abroad. One of them is that the company can fetch better valuation. It may be easier to raise money in these markets (Hong Kong or US) via a rights issue or other ways as they understand the business better. In Malaysia, there seems to be some psychological hang-up among certain government-linked funds that they ought to support the national carrier Malaysia Airlines instead. So, getting the institutional support in Malaysia is relatively more difficult,” he said.

 

However, the source said the company would still be majority controlled by Malaysians and was currently in talks with a key government-linked fund to take up a strategic stake at a “low valuation” in a pre-IPO exercise.

 

That AAX’s major shareholders could find it relatively easier to “sell” the LCC story to foreign investors can be gleaned from the foreign shareholding level of listed AirAsia Bhd. As at Feb 5 this year, it had a high foreign shareholding of some 49.8%. In fact, in December last year, it stood at just over 50%, which exceeded the 45% limit of foreign ownership of its shares as per the company’s Articles of Association.

 

While shares held by foreigners within the prescribed limit are entitled to all rights and entitlements, those held by foreigners which have exceeded the limit are also similarly entitled except that they do not include voting rights.

 

Furthermore, based on Bloomberg data, of the top 20 shareholders based on size of holdings (apart from Tune Air which is the single largest shareholder), the EPF is the only government-linked fund whose name appears on the list with a stake of 7.16% as at May 27.

 

Source: http://biz.thestar.com.my/news/story.asp?file=/2010/6/10/business/6433994&sec=business

[Mohd Azizul Ramli 2]

 

 

Azran Osman-Rani

8 hours ago

 

Special day for us today! We've converted from "AirAsia X Sdn Bhd" to "AirAsia X BERHAD" - from private limited, to public limited company status!

[flee 5]

AirAsia X to offer for sale 790.12m shares under IPO

 

KUALA LUMPUR: AirAsia X Bhd, which is seeking a listing on Bursa Malaysia, is offering for sale 709.12 million shares, comprising of 592.59 million new shares and 197.53 million existing shares.

 

The institutional offering of up to 685.679 million IPO shares, is 28.9% of the enlarged issued and paid-up share capital of the company.

 

According to the draft prospectus on the Securities Commission website, the 685.679 million IPO shares comprise of up to 197.530 million offer shares and 227.407 million issue shares to Malaysian institutional and selected investors and foreign institutional and selected investors at the institutional price.

 

Another 260.740 million issue shares would be offered to Bumiputera institutional and selected investors at the institutional price.

 

The retail offering would comprise of 104.444 million shares, or 4.4% of the enlarged issued and paid-up share capital, at the retail price.

 

This would involve 33.333 million issue shares, or about 1.4% of the enlarged issued and paid-up share capital while another 71.111 million issue shares, or 3.0% of the enlarged issued and paid-up share capital, would be offered to the Malaysian public of which 50% are reserved for subscription by Bumiputera public.

 

The final retail price will be determined after the institutional price is fixed.

 

On the utilisation of the proceeds from the new shares, AirAsia X said 21.5% would be for capital expenditure, 55.1% to repay bank borrowings. 2.2% for general working capital and 3.2% for estimated listing expenses.

 

To recap, AirAsia X is the long-haul arm of AirAsia Bhd which is celebrating its fifth anniversary on Friday.

 

Its fleet of 11 Airbus SAS A330 and A340 planes flies to 12 destinations across Asia and Australia and it also had chartered flights to Jeddah.

 

AirAsia X focuses on the low-cost, long-haul segment. It was set up in 2007 to provide high-frequency and point-to-point networks to the long-haul business.

 

According to its draft prospectus, its revenue grew from RM230.7mil in 2008 to RM1.9bil in 2011, representing a CAGR of 100.6%.

 

AirAsia X said it presently it does not have any formal dividend policy but it would intend to adopt a progressive dividend policy.

 

On its assets, it said as at June 30, 2012, it had RM1.369bil million of property, plant and equipment, including RM51.9mil of aircraft engines and RM1.246bil of aircraft frames and service potential.

 

On its operations, it said for the six month ended June 30, 2012, Revenue from passenger seat sales on scheduled flights decreased by RM30.3mil, or about 4.5%, to RM640.4mil for the six months ended June 30, 2012 versus RM670.70mil in the previous corresponding period.

 

“This decrease was due primarily to a 4.7% decrease in seat capacity in the six months ended June 30, 2012 (H1, 2012) as compared to the six months ended June 30, 2011 (H1, 2011) as a result of a reduction in the average number of aircraft during the period from 11.0 to 9.0 caused by the wet lease of our two A300-340s to third parties during the H1, 2012,” it said.

 

Ancillary revenue including AirAsia Insure increased to RM167.2mil, or about 20.5%, for H1, 2012 from RM138.7mil a year ago.

 

“This increase was due primarily to the overall increase in number of passengers carried in H1, 2012, revisions to our rates relating to certain of our ancillary products and the introduction of Optiontown as a new ancillary product,” it said.

 

AirAsia X said fuel costs decreased 3.5% to RM483.1mil in H1, 2012 from RM500.7mil a year ago, mainly due to a 6.7% decrease in fuel consumed in H1, 2012 from a year ago.

 

Source: http://biz.thestar.c...13&sec=business

Edited November 2, 2012 by flee

[Mushrif A 3]

The exposure prospectus is available to all on the SC's website. Section 7 gives you a fairly detailed insight on the operations of D7. Worth a read.

[flee 5]

The exposure prospectus is available to all on the SC's website. Section 7 gives you a fairly detailed insight on the operations of D7. Worth a read.

Link:

http://www.sc.com.my/main.asp?pageid=1230&menuid=&newsid=&linkid=&type=

[flee 5]

AirAsia X IPO prospectus shows strength. AirAsia synergies help, also require definition

 

CAPA Analysis: http://centreforaviation.com/analysis/airasia-x-ipo-prospectus-shows-strength-airasia-synergies-help-also-require-definition-87566

[flee 5]

Fernandes: Offering 33% of AirAsia X to public ideal

 

KUALA LUMPUR: AirAsia Bhd group chief executive officer Tan Sri Tony Fernandes said he would, ideally, like to offer a larger portion, or 33%, of long-haul low-fare airline AirAsia X shares to the public when it eventually lists.

 

“I want every one to be able to buy shares. AirAsia is essentially made up of the common man on the street. I always talk to everyone.

 

“I am one of the few CEOs who goes and meets every single person. The feedback I get is that they can't get shares, but want to be involved in it. So, I would like to do 33%,” Fernandes told StarBiz.

For AirAsia X's flotation, it would be listing about 30% of its shares. So a 33% allocation for the public portion would effectively translate into 10% of the entire paid-up capital.

 

“The common man flies with us, so should get some reward for flying with us. The problem now is that there is not enough shares in issue. That's why I want to do 33%. It's not much too it's basically like 20,000 people taking 100 shares each,” Fernandes said.

 

Last year, Malaysia saw the mega listings of Astro Malaysia Holdings Bhd and IHH Healthcare Bhd, where people complained about the small number shares offered to the public compared with the total offered for the listing exercises.

 

In Astro's case, it offered 1.518 billion shares, equivalent to 29.2% of its enlarged capital. Of that, some 83% was allocated to Malaysian and foreign institutional investors and select investors, including bumiputra investors, and cornerstone investors, meaning 17% was allocated for the public offer.

 

As for IHH, of the combined 2.23 billion shares, 1.39 billion were for cornerstone investors and 498.01 million for local and foreign institutional investors. Retail investors were allocated 349.15 million shares or 15.7% of the listing offer.

 

In Tune Ins Holdings Bhd's case, which will be listed on Feb 22, some 210 million new shares are up for sale. Some 41.34 million shares or 20% have been allocated for retailer investors.

 

Typically, where initial public offerings are concerned, investment bankers favour foreign investors and local institutions over the retail investor.

 

The rationale? The presence of cornerstone investors can better ensure the success of the IPO. Cornerstone investors are longer term in nature and will likely not sell for an extended period of time.

 

Source: http://biz.thestar.com.my/news/story.asp?file=/2013/2/5/business/12668933&sec=business

[Ganesh.r 0]

http://online.wsj.com/article/SB10001424127887324162304578305522771195456.html

 

 

 

KUALA LUMPUR—AirAsia X Bhd 5099.KU 0.00% ., the long-haul arm of Southeast Asia's largest budget carrier by fleet size, is likely to delay a planned $250 million initial public offering in Malaysia until after general elections there are held, two people familiar with the process said Friday.

AirAsia X, a unit of AirAsia Bhd., had planned to list by March, one of the people said. "The elections will likely cause a slight delay," the person said.

Malaysia's general elections are required by law to be held by June 27, but are widely expected to take place earlier.

State-run news agency Bernama on Thursday quoted Prime Minister Najib Razak as saying Parliament could be dissolved "very, very soon."

Investors in Malaysia's equity markets often turn jittery before and immediately after general elections. In 2008, the 30-share benchmark Kuala Lumpur Composite Index tumbled nearly 10% on the first day of trading after the National Front coalition, which has ruled Malaysia since independence in 1957, lost its two-thirds majority in Parliament for the first time.

"It is smart to let the election risk pass, so that investors can take better-informed decisions," the second person said.

Last year was a banner year for IPOs in Malaysia, which vaulted to fifth place globally by deal value. It is expected to struggle to retain that ranking this year, but a number of big-ticket deals, such as power producer Malakoff Corp Bhd.'s planned $1 billion IPO, will help keep the country in the deals headlines.

In any case, it looks to be a busy market year for AirAsia. Chief Executive Tony Fernandes told The Wall Street Journal last month that the group hopes to list Indonesia AirAsia, in which it holds 49%, on the Jakarta stock exchange in the third quarter.

AirAsia X still plans to sell up to 790 million shares—equivalent to a one-third stake—in its IPO, one of the people said.

According to the draft prospectus, 685.6 million shares were to be allotted to institutional investors and 104.4 million shares to retail investors. The company hasn't disclosed the pricing.

More than half of IPO proceeds will be used to repay bank loans, while around a fifth will fund capital expenditure, including the purchase of equipment and spare parts for aircraft, the prospectus said.

AirAsia X owns a fleet of nine Airbus A330-300s for scheduled services and has two A340-300s for wet-lease and charter operations flying to 12 destinations across Asia and the Middle East.

The company has appointed CIMB Investment Bank as its principal adviser to the IPO. Maybank Investment Bank, 1155.KU -0.78% CIMB and Credit SuisseCSGN.VX -0.48% are the joint global coordinators.

Write to Abhrajit Gangopadhyay at Abhrajit.gangopadhyay@dowjones.com

 

[flee 5]

AirAsia Kicks Off Share Sale to Raise US$300 Million, Terms Show

 

AirAsia X Bhd., the long-haul arm of Asia’s biggest budget carrier, has started gauging investor interest for its $300 million Malaysian initial public offering.

 

The five-year-old airline plans to offer 790.1 million shares to raise between $250 million and $300 million, according to a term sheet obtained by Bloomberg News. The Sepang, Malaysia-based company intends to start trading on the Kuala Lumpur stock exchange on July 10, the document shows.

 

Proceeds will help finance new aircraft as AirAsia X takes delivery of seven Airbus SAS A330 planes this year, adding to an existing fleet of 11 aircraft, Chief Executive Officer Azran Osman-Rani said in March. This is the second of three proposed listings by affiliates of Malaysia’s AirAsia Bhd. (AIRA) as the group raises funds to accelerate expansion.

 

Of the shares to be sold, 75 percent will be new stock and the remainder from three existing shareholders, the term sheet showed. 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, it said.

 

AirAsia rose as much as 1.7 percent in Kuala Lumpur trading today as of 10:55 a.m. local time and was poised for its highest close since Oct. 23.

 

Asia Aviation Pcl (AVB), the parent of Thai AirAsia Co., was the first among AirAsia affiliates to sell shares in Bangkok last year. AirAsia’s Indonesian unit will also go public in the third quarter, Group Chief Executive Officer Tony Fernandes said in February.

 

Source: http://www.bloomberg.com/news/2013-05-13/airasia-kicks-off-share-sale-to-raise-300-million-terms-show.html

[flee 5]

AirAsia X offers free tickets to any destination for initial public offering retail investors

 

PETALING JAYA: Tan Sri Tony Fernandes will be on a roadshow to meet retail investors and remisiers across the country in early June for the AirAsia X (AAX) initial public offering, whose shares are likely to be priced at RM1.10 to RM1.30 a share.

The airline is offering a larger retail portion than most companies in recent times, comprising 252 million shares or 10.6% of its enlarged share capital compared to 2%-5% offered by other companies to retail investors.

And to lure retail investors to subscribe to the IPO, AAX is dangling a zero fare return air ticket to any destinations flown by the airline to investors that buy 10,000 IPO shares, and 3 tickets for those who buy 100,000 IPO shares as part of its shareholder benefit programme.

“It was my idea that we should meet retail investors because when I was young and was in England, I saw a lot of retail-based IPOs such as British Gas, British Telecoms and even that of my good friend Sir Richard Branson's Virgin group. It was for the public.

“Since we have benefited from Malaysians that fly with us, and rather than just the institutional investors benefiting from the IPO, we thought it was good to let Malaysians benefit by offering them free tickets if they subscribe to the shares,'' AAX director Fernandes told StarBiz yesterday.

While Fernandes said he would do his ceramah-style talks to retail investors in Malaysia, AAX CEO Azran Osman-Rani would meet institutional investors here and abroad.

The retail roadshow would be for a week and Fernandes (pic) claimed it was “something not done before. We will do the unconventional by talking directly to retail investors instead of sticking to just the traditional way of meeting only institutional funds.''

“Normally the public allocation is small, about 2% but we are offering a lot more shares for the public portion as we want them to be involved in the airline (as shareholders),'' he said.

He added that “we are always giving out free seats, so why not give them to those that subscribe to our shares. And if you keep the shares, you will get free tickets every year (for a maximum of three years).''

AAX, which is a sister company of AirAsia Bhd, plans to sell 790.12 million shares to raise US$300mil and and part of the funds will be used to finance new aircraft purchases. The airline is expected to take delivery of seven Airbus A330 this year.

AAX is headed for the Main Market of Bursa Malaysia and the listing is scheduled for July 10. It plans to start taking orders from institutional investors from June 10.

Fernandes declined to give any numbers, but analysts are valuing the company at RM1.50-RM1.70 a share. Those very bullish say it is about RM2 a share. Though analysts are looking at the IPO of RM1.30-RM1.40 a share, others think it could be lower at RM1.10 a share. But these are early days and the final pricing would be known later.

“AAX is a growth story. There is demand for budget air travel across the region and it wants to tap into that. It is tripling its fleet in three years. But of course like any airline, it is sensitive to exchange rates and fuel prices, and yields can come under pressure with excess demand but it is be able to keep a high and stable path with loads of about 80% in the medium term,'' said an analyst.

After the IPO, the major investors of AAX are Aero Ventures Sdn Bhd with 34.4%, AirAsia 13.7%, and both Orix Airline Holdings Ltd and Manara Malaysia Ltd with 6.4% each.

Apart from the retail portion of 10.6%, the others making up the 790 million shares are Miti bumiputra investors with 11% and local and foreign institutional funds with 11.7%.

AAX currently serves 14 destinations with 11 aircraft across Asia and it plans to expand further into North Asia and Australia.

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.

Source: The Star

[flee 5]

AirAsia X launches up to $370 million IPO amid fleet expansion

 

Malaysian long-haul budget carrier AirAsia X launched an up to $370 million initial public offering on Monday, seeking funds for its fleet expansion as it targets buoyant travel demand in Asia-Pacific and looks to fend off regional rivals.

The carrier, which competes with Singapore Airlines' (SIAL.SI) Scoot and Qantas Airways' (QAN.AX) Jetstar, has said it plans to add 13 Airbus A330 wide-bodied planes in total this year and next to take its fleet to 23 aircraft by 2014.

The expansion comes as passenger traffic in the Asia-Pacific region more doubled between 1998 and 2012, putting air travel activity in the region on par with North America, according to figures from research firm Strategic Airport Planning Ltd, which were cited in AirAsia X's preliminary IPO prospectus.

"The focus in on the sweet-spot flights of 4 to 8, or possibly 9 hours," Tony Fernandes, AirAsia X's founder, told reporters at the IPO launch. He added that AirAsia X plans to strengthen its position in its key markets in Australia and East Asia.

AirAsia X and its shareholders are offering 790.1 million shares in an indicative price range for institutional investors of 1.15 ringgit to 1.45 ringgit per share, according to a term sheet of the deal seen by Reuters. About 75 percent of the offering will come from new shares.

The company plans to use 33.3 percent of the proceeds to repay bank loans, with another 32.6 percent set for capital expenditure and 29.7 percent as general working capital.

AirAsia X's chief executive, Azran Osman Rani, said the carrier's expansion would come through more flights on existing routes as well as from new routes within some countries where it already operates.

In an interview with Reuters in January, Azran said the carrier was aiming to build brand awareness in new markets like China and Japan and establish crucial early dominance on key routes after dropping its loss-making Europe and India routes last year.

"You want to make sure you are well ahead both in terms of dominating individual routes but also dominating across the networks," he said then.

CIMB (CIMB.KL), Credit Suisse (CSGN.VX) and Maybank (MBBM.KL) were hired as joint global coordinators on the IPO. Barclays, BNP Paribas, Citigroup, CLSA, HSBC and Morgan Stanley are also acting as joint bookrunners.

The deal is scheduled to be priced on June 24, with the stock market debut set for July 10. ($1 = 3.0935 Malaysian ringgits)

Source: http://www.reuters.com/article/2013/06/10/us-airasiax-ipo-idUSBRE95908J20130610

[flee 5]

AirAsia X banking on retail market

 

JULY 10 LISTING: Low-cost airline offering 700.12m shares at RM1.45 each

AIRASIA X Bhd, the long-haul arm of AirAsia Group, is banking on retail market to help make its initial public offer (IPO) a success.

Founder Tan Sri Tony Fernandes, who helped turn the once-ailing AirAsia Bhd into one of the world's biggest low-cost airlines, is keen to raise as much as RM860 million from the listing exercise.

Some 150 million shares, or 19 per cent, on the table are being offered to the Malaysian public at RM1.45 each, which will value the company at more than RM2.2 billion.

The large number of shares offered to the public was given the thumbs up by Minority Shareholders Watchdog Group.

"As regards to AirAsia X's IPO, we are positive on the higher proportion of share allocation to retail investors at around 10 per cent, compared with the two per cent offered by most other companies," MSWG chief executive officer Rita Benoy Bushon said in its newsletter last month.

"This translates to around 252 million shares of its enlarged share capital."

AirAsia X is enroute to be listed on the Main Board of Bursa Malaysia Securities on July 10.

Prior to the IPO, AirAsia X received international news coverage when Richard Branson's Virgin Atlantic Airways Ltd (Virgin Atlantic) sold its 10 per cent stake in the carrier for RM66 million. The sale price valued AirAsia X at RM660 million.

Virgin Atlantic emerged in AirAsia X in 2007 as one of the carrier's initial seed shareholders.

AirAsia X said in its prospectus, launched yesterday, that its IPO exercise consists of 790.12 million shares comprising an offer for sale of up to 197.53 million existing shares and a public issue of 592.59 million new shares.

Chief executive officer Azran Osman-Rani said RM280 million of the gross proceeds will be used for the carrier's capital expenditure within two years while RM285.8 million will be to repay bank borrowings within three months.

The balance RM255.45 million will be used for general working capital and RM38,000 on estimated listing expenses, he added.

Commenting on its growth plans, Azran said the carrier will continue to expand its presence in North Asia and Australia through new routes and increased frequencies.

"The company will complement the current routes that the AirAsia Group serves. We are well-positioned to tap the immense demand," he said.

The carrier, incorporated in 2006, serves 14 destinations across Asia, Australia and the Middle East while the new route to Busan, South Korea, will start next month.

Read more: http://www.btimes.com.my/Current_News/BTIMES/articles/20130611011221/Article/index_html

[Cheng Long 0]

Wondering if any aviation enthusiasts planning to be shareholder?

[flee 5]

Overwhelming demand for AirAsia X IPO, price likely lower

 

The share price for AirAsia X Bhd's initial public offering (IPO) will likely be lower due to the overwhelming demand for the institutional and retail portions in an exercise that will raise at least RM1.1 billion to fund the long-haul budget carrier's expansion.

Bankers familiar with the fund-raising exercise said AirAsia X might close the books this Friday instead of next Monday for what is seen as one of the biggest share offerings in the Malaysian market.

"Pricing is likely lower end of the initial RM1.45 a share in order to leave money on the table for investors," a banker told The Malaysian Insider.

The bankers also said that there have been orders of 1.5 billion shares for the 396 million available shares for institutional investors.

It is learnt the Bumiputera portion under the Ministry of International Trade and Industry (MITI) has been oversubscribed at least three times while the retail portion has been oversubscribed at least five times.

There had been suggestions of a boycott of the IPO by Bumiputera groups upset with AirAsia X chief executive Azran Osman-Rani for his criticisms of Umno's Utusan Malaysia daily which has been described as racist for its critical reporting on Chinese voters following the recent general election.

The groups have asked Azran to apologise or face a boycott of the airline and the IPO while Utusan itself said it will not take advertisements from the carrier.

AirAsia X is offering up to 790.12 million shares in the IPO and depending on whether the “green-shoe option” is exercised, it plans to raise between RM1.1 billion to RM1.3 billion to fund its expansion and pay off debts.

The long-haul affiliate of Asia's biggest low-cost carrier, AirAsia Bhd, is offering a large retail portion, comprising 252 million shares or 10.6 per cent of its enlarged share capital.

The remaining 538.011 million shares are allocated under the institutional offering.

The Edge news portal reported today that only 10 per cent of the blue forms for the retail portion (meant for eligible air passengers) have been taken up, leaving the remaining 90 per cent of some 50 million shares for other investors.

It said this development provides “a second chance” for those who want to own the shares but are unable to due to the overwhelming response for the public and bumiputera portions.

The blue forms were for those who had flown with the airline over the past 24 months prior to the prospectus launch on June 10, and those classified as “BIG shot” in the loyalty programme after having earned points with their flights.

Source: http://www.themalaysianinsider.com/business/article/overwhelming-demand-for-airasia-x-ipo-price-likely-lower/

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News reports suggest the final IPO price is now RM1.25 apiece.

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All defined terms used in this announcement shall have the same meaning as those defined in the Prospectus issued by AirAsia X dated 10 June 2013.

Following the completion of the bookbuilding process under the Institutional Offering on 21 June 2013, CIMB Investment Bank Berhad, on behalf of AirAsia X, wishes to announce that the Institutional Price and the Final Retail Price have been fixed, as set out below:

INSTITUTIONAL PRICE - RM1.25 PER SHARE

FINAL RETAIL PRICE - RM1.25 PER SHARE

Applicants under the Retail Offering should note that the retail price of RM1.45 per Share ("Retail Price") was paid in full upon application under the Retail Offering. As the Final Retail Price of RM1.25 per Share is less than the Retail Price, a refund of the difference of RM0.20 per Share shall be made to successful applicants of the Retail Offering, without any interest thereon. Details of the refund mechanism are set out in Section 4.7.3 of AirAsia X's prospectus dated 10 June 2013.

The Retail Offering closed at 5.00 p.m. on Wednesday, 19 June 2013.

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AirAsia X's public retail offering oversubscribed 3.83 times

 

KUALA LUMPUR: AirAsia X Bhd's public retail offering of 150 million shares was oversubscribed by 3.83 times.

Malaysian Issuing House Sdn Bhd said on Monday the public retail offering was made to Malaysian citizens, companies, co-operatives, societies and institutions.

"A total of 38,975 applications for 574.99 million issue shares were received from the Malaysian public for a total of 150 million issue shares available under the public retail offering, representing a subscription rate of 3.83 times," it said.

MIH said the institutional offering to Malaysian and foreign institutional investors and selected investors including Bumiputera institutional and elected approved by the Ministry of International Trade and Industry had also closed.

As the institutional price was fixed at RM1.25 per share on June 21, the final retail price was fixed at RM1.25 per share and the difference of 20 sen a share would be refunded to successful retail applicants within 10 market days from Monday.

Source: The Star

CAPA report: http://centreforaviation.com/members/direct-news/airasia-x-finalises-institutional-price-for-ipo-exercise-115683

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AirAsia X fair value at RM1.50 a share, says Public Investment Bank

 

A day before listing on Bursa Malaysia, AirAsia X has been rated at a fair value at RM1.50 a share by Public Investment Bank (PIB), a premium of 25 sen above the budget long-haul carrier's public issue price of RM1.25 a share.

The fair value of RM1.50 would see the budget carrier trading at a price-earnings ratio (PER) of 20 times for financial year 2014, which is higher than the average PER of 12 times for low-cost carriers.

PIB's rationale for the higher PER was because of AirAsia X's low-cost structure and the synergies it has with Asia's largest budget carrier, AirAsia, the bank said today.

The initial public offer (IPO) has raised RM987 million, with RM280 million of the IPO proceeds to be utilised for capital expenditure and RM286 million as repayment for bank borrowings. The company will also use RM137 million as working capital and RM38 million to defray listing expenses.

AirAsia X's IPO saw the offer for sale of 197 million shares and a public issue of 593 million shares. The IPO received good response from investors as the public issue was oversubscribed by 3.83 times.

The carrier flies to 14 destinations across Asia, the Middle East and Australia, with a route to Busan in South Korea beginning July 15. It operates a fleet of 11 A330-300 planes for scheduled services and two A340-300 planes which are currently wet-leased.

For its expansion plans, the airline has committed to take delivery of another 22 A330-300s up till 2017 and has also ordered 10 A350-900s to be delivered from 2018 onwards.

PIB said the carrier has one of the lowest unit operating cost in the world with a cost per available seat kilometre (CASK) of US3.74 cents (11.92 sen) and US1.90 cents (6.06 sen), excluding fuel, in 2012 which was 67.3 per cent and 75.3 per cent lower respectively than the 10 largest full-service carriers (FSCs) based in Asia-Pacific. In tandem with the lower cost base, AirAsia X can offer airfares which are on average 30 per cent to 50 per cent lower than other FSC's.

It added that as a member of the established AirAsia group, the long-haul carrier will benefit from the group’s extensive network connection, cross-marketing and bulk purchase synergies. This would enable it to capitalise on Air Asia's brand for global visibility and recognition.

But the key risk to its performance would be fuel price volatility, foreign exchange rate fluctuations, intensifying competition from rival airlines, passenger load factor and utilisation rate amid its aggressive fleet expansion.

Source: http://www.themalaysianinsider.com/business/article/airasia-x-fair-value-at-rm1.50-a-share-says-public-investment-bank/

 

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AirAsia X is poised to build on its leading position in Asia’s emerging medium/long-haul low-cost sector after completing a successful initial public offering. The IPO, which raised MYR741 million (USD232 million), will enable the Malaysia-based company to pursue ambitious fleet and network expansion with a focus on exploiting opportunities in the rapidly growing Asia-Pacific market.

While the LCC penetration rates within Southeast Asia are now above 50%, the medium-haul market connecting Southeast Asia with other parts of the Asia-Pacific region remains relatively unpenetrated. AirAsia X is now focusing on this market, having dropped long-haul services in early 2012 as part of a drastic network restructuring which has already improved its profitability and outlook. Expansion will come as AirAsia X adds capacity in several markets it already serves from its existing hub in Kuala Lumpur and opens new bases in other Southeast Asian countries, starting with Thailand.

AirAsia X is no longer the only widebody low-cost operator targeting Southeast Asia’s under-penetrated medium-haul markets. But the three other Asian carriers competing in this sector are smaller and have little or no growth planned for the next 18 months. AirAsia X meanwhile plans to roughly double in size by the end of 2014, which should give it at least a 60% share of Southeast Asia’s medium/long-haul low-cost sector.

AirAsia X joins AirAsia Berhad and Thai AirAsia with stock listings

AirAsia X share began trading on Bursa Malaysia, formerly known as the Kuala Lumpur Stock Exchange, on 10-Jul-2013. Just over 790 million shares were sold, including 592.6 million new shares, at MYR1.25 per share (USD39 cents), making it the largest IPO in Malaysia so far this year. Shares rose slightly during the first day of trading on 10-Jul-2013 but have since slipped, closing back at the MYR1.25 level on 15-Jul-2013.

The float involved a 33% stake of AirAsia X with its largest shareholder, Aero Ventures, accounting for most of the divesture. Aero Ventures, an investment firm controlled by AirAsia Group founder and CEO Tony Fernandes and partners, still has a leading 34.4% stake in AirAsia, down from 52.2% before the IPO. AirAsia Berhad, which owns 100% of the Malaysian short-haul carrier AirAsia along with minority stakes in other AirAsia affiliates, sold down its stake from 18.3% to 12.1%.

AirAsia X is technically not part of the AirAsia Group but has access to the AirAsia brand through a licensing agreement. AirAsia X also uses the AirAsia website and offers connections with the Malaysian short-haul carrier, providing a seamless experience for passengers. Following the AirAsia Group model of establishing affiliates in other Asian countries, AirAsia X plans to establish new joint venture medium/long-haul LCCs, starting with Thai AirAsia X, which will work closely with short-haul operator Thai AirAsia.

See related report: AirAsia X selection of Bangkok as second base increases pressure on Thai Airways

Thai AirAsia X is backed by AirAsia X and Thai AirAsia’s largest shareholder and CEO, Tassapon Bijleveld. The new carrier is in the process of applying for an air operators’ certificate in Thailand and is expected to launch services in late 2013 or early 2014.

Thai AirAsia completed its own IPO in 2012. Indonesia AirAsia, which is 49%-owned by AirAsia Berhad, is also now preparing for an IPO which it aims to complete by the end of 2013.

AirAsia Berhad also owns 40% of AirAsia Philippines, which launched services in 2012 and now has a stake in Philippine LCC Zest Airways. AirAsia Berhad owns 49% in AirAsia India, which plans to launch domestic services in 4Q2013, but recently sold its 49% stake in AirAsia Japan to controlling shareholder All Nippon Airways (the carrier will drop the AirAsia name on 31-Oct-2013).

AirAsia X sees improvement in profits following network restructuring

AirAsia X launched services in 2007, becoming the fourth AirAsia-branded carrier following AirAsia (Malaysia), Thai AirAsia and Indonesia AirAsia. But of these initial four carriers, AirAsia X has been the least profitable. AirAsia X has had only two profitable years, 2010 and 2012. But its financial outlook has significantly improved since the network restructuring it implemented in early 2012, which eliminated unprofitable routes to Europe, New Zealand and India.

AirAsia X reported a record operating profit of MYR49 million (USD15 million) in 2012, a significant improvement compared to the MYR60 million (USD19 million) operating loss in 2011 and small MYR7 million (USD2 million) operating profit from 2010. A further significant improvement to the bottom line is likely in 2013 after AirAsia X reported a 72% increase in operating profit for 1Q2013 to MYR58 million (USD18 million).

AirAsia X in 1H2012 cut five of 16 destinations: Mumbai (Jan-2012), New Delhi (Mar-2012), Paris Orly (Mar-2012), London Gatwick (Mar-2012) and Christchurch (May-2012). The cuts, which included its three longest routes and India, drove a drop in revenues and RPKs for 2012 and in 1Q2013 (see background information). But costs dropped by an even bigger margin driven by lower fuel consumption as extremely unprofitable services to Paris and London, which were served with now phased out A340s, were axed.

In 1Q2013, operating costs dropped by 5% year-over-year to MYR479 million (USD150 million) as fuel consumption declined by 21%. Revenues dropped by only 2% from MYR537 million (USD165 million) in 1Q2012 to MYR525 million (USD165 million) in 1Q2013.

The restructuring has resulted in a 13% drop in average stage length from 5,771km in 1Q2012 to 5,039km in 1Q2013. AirAsia X, however, was able to maintain daily aircraft utilisation levels at just over 16hrs as more flights within Asia were added to fill the void.

Posting financial improvements in 2H2012 and 1Q2013 were essential to the successful IPO. AirAsia X initially sought an IPO in late 2012 but its initial prospectus did not show a clear path to profitability because at the time financials were only available through 1H2012.

Full Analysis: http://centreforaviation.com/analysis/airasia-x-strives-to-widen-the-gap-with-long-haul-lcc-competitors-as-ipo-enables-accelerated-growth-118941