Jump to content
MalaysianWings - Malaysia's Premier Aviation Portal
Sign in to follow this  
JuliusWong

AirAsia to Buy Control of Batavia Air

Recommended Posts

Very sharp..Air Asia purchase of Batavia Air is off : http://www.themalays...uy-batavia-air/

Will there be any ranting and raving to follow?

Well, he has not been very keen on acquisitions in the first place. Batavia was in trouble, and he thought he could pick up a "bargain" and mould it into another AirAsia. It is not so easy these days, cos AirAsia is seen as a big fish and many sellers will demand a big amount for their company.

 

No more RM 1 company takeovers, with or without debt!

Share this post


Link to post
Share on other sites

Batavia Air CEO: AirAsia, Fersindo Drop Plan to Buy Carrier

 

 

AirAsia Bhd. (5099.KU) and its Indonesian partner PT Fersindo Nusaperkasa have dropped their plan to buy domestic carrier PT Batavia Air as the three companies failed to reach an agreement, an official with Batavia Air said Thursday.

 

"We will continue to seek strategic partners to develop our business," Batavia Air Chief Executive Director Yudiawan Tansari told Dow Jones Newswires.

 

Mr. Tansari declined to specify whether they failed to reach an agreement on the value of Batavia Air.

 

AirAsia, Asia's largest budget airline by fleet size, said in July it planned to buy a 49% stake in closely held Batavia Air, while Fersindo would buy the remaining 51% stake. The companies were expected to pay a total of $80 million for Batavia Air.

 

Officials at AirAsia and Fersindo weren't immediately available for comment, but PT AirAsia Indonesia spokeswoman Audrey Progastama Petriny said they will issue a statement later Thursday.

 

Indonesia is seen by many analysts as one of the world's last markets for large growth in air travel. While its population of about 240 million people makes Indonesia the world's fourth most populous country after China, India and the U.S., only a small portion of its citizens have experienced air travel.

 

A lack of good bridges, trains and ferries sometimes makes air travel the only mode of transportation in the 17,000-island archipelago. Meanwhile, business travel has taken off as companies fly to far corners of the country in search of its rich natural resources, including coal, tin and palm oil.

 

The number of domestic and international passengers in the air in Indonesia rose more than 65% in the past two years to about 68 million last year, according to Indonesia's Directorate General of Civil Aviation.

 

 

Read more: http://www.foxbusiness.com/news/2012/10/10/batavia-air-ceo-airasia-fersindo-drop-plan-to-buy-carrier

Share this post


Link to post
Share on other sites

web.jpg

 

Batavia Air Acquisition Hits Turbulence

 

The planned acquisition of Indonesia’s Batavia Air by Malaysia’s AirAsia and Indonesia’s Fersindo Nusaperkasa is on the verge of collapse, a source revealed on Tuesday.

 

The source said the potential failure was partly due to a request by AirAsia and Fersindo to lower the purchase price from that agreed to earlier. Metro Batavia, the existing shareholder, has refused to lower the price.

 

Batavia Air’s leadership has met to plan a consolidation to reduce the airline’s operational costs, the source said.

 

“The meeting was led by Yudiawan Tansari, Batavia Air’s president director, who was assisted by the operational director Herman Santoso,” the source said.

 

Among the moves to greater efficiency being considered are scrapping airline crew transportation, reducing staff numbers and improving the utilization of its fleet.

 

The airline operates 30 aircraft on domestic routes and to select international destinations including Singapore, Jeddah in Saudi Arabia, and Guangzhou in China.

 

In a memorandum of understanding signed in July, AirAsia and its partner bought all of Batavia Air from Metro Batavia for an estimated total price of Rp 750 billion ($77.9 million).

 

Through this deal, AirAsia would own a 49 percent stake in Batavia Air, while the remaining 51 percent would be owned by Fersindo.

 

The acquisition was expected to be completed in the second quarter of 2013, but is still subject to regulatory approvals in Indonesia.

 

AirAsia and Fersindo are partners in Indonesia AirAsia, the local airline unit of the Malaysia-based budget carrier.

 

Herman declined to comment. IAA communications manager Audrey Progastama Petriny also declined to comment.

 

Aviation analyst Ruth Hanna Simatupang speculated that the cause of the request to lower Batavia’s selling price was the airline’s hefty debts. No recent data on Batavia’s debts are available on the company’s website.

 

“If the acquisition fails, Batavia Air must reduce costs to survive,” Ruth said.

 

AirAsia group chief executive Tony Fernandes did not respond to a request for comment.

 

Investor Daily

 

Source: http://www.thejakartaglobe.com/business/batavia-air-acquisition-hits-turbulence/549426

Share this post


Link to post
Share on other sites
AirAsia group chief executive Tony Fernandes did not respond to a request for comment.

Now that is novelty value if ever there is any - Tan Sri Red One without a word or two ? :D

 

If it's down to price alone as reported, then it's sad - one party, either seller or buyer, probably being unrealistic

Assuming that is, there is synergistic advantages to be had from the acquisition in first place :)

Share this post


Link to post
Share on other sites

Well, he has not been very keen on acquisitions in the first place

If that is the case, he certainly had a whole lot of us believing otherwise the way he enthused about the Batavia acquisition when first announced :rolleyes:

In any case, my gut feel is that Tan Sri is still trying to salvage the deal - perhaps some late in the day negotiations over some sickeningly sweet desserts ?! :D

Share this post


Link to post
Share on other sites

If that is the case, he certainly had a whole lot of us believing otherwise the way he enthused about the Batavia acquisition when first announced :rolleyes:

In any case, my gut feel is that Tan Sri is still trying to salvage the deal - perhaps some late in the day negotiations over some sickeningly sweet desserts ?! :D

Well, as a good businessman, he should have an open mind. So even if he is not keen on acquisitions (and prefers organic growth), if an opportunity presents itself, he has to check it out.

 

Yes, he may be still trying to negotiate - but he is telling the owners of Batavia Air that he will only buy if the price is right for him. And after doing due dilligence, the original price may have been too high.

Share this post


Link to post
Share on other sites

In another topic on this board i had a go at the esteemd brotherhood of Malaysias Aiviation Analysts.

I am sitting at TDH typing this respons as we speak.

It was only a few weeks ago that the contingent of Malaysian analysts embarked on praising the AK stock into kingdom come

as a result of the Red Boss machinations towards Batavia.

 

There was, and i quote, an overwhelming tendency for an "outperforming" call. Not just buy, no no, "outperforming", that was the mantra. Target price. a whopping RM. 4.06.

Todays reality. the stock is RM. 3.04.

Will they ever learn? No.

As long as the Red Boss is playing them as a violin, joe public, will follow suit.

And the brothers in the ivory towers will spin it any otherway they deem fit to explain that they saw this coming. Anyway. We, the ignorants, have read it all incorrectly.

 

The brothers at the corner office are making it easy for me. Next please.

 

Cheers

Art

Edited by Arthur Van Straten

Share this post


Link to post
Share on other sites

Well, as a good businessman, he should have an open mind. So even if he is not keen on acquisitions (and prefers organic growth), if an opportunity presents itself, he has to check it out.

 

Yes, he may be still trying to negotiate - but he is telling the owners of Batavia Air that he will only buy if the price is right for him. And after doing due dilligence, the original price may have been too high.

 

You are truly the 'worm in his stomach' as the Chinese saying goes.... pls keep us posted on the latest insight to this buy out attempt

Edited by V Wong

Share this post


Link to post
Share on other sites

Uncle Tony latest facebook status:

 

"Airasia have pulled out of Batavia acquisition to focus management time on organic growth. But we will still colloborate with Batavia. A good win win. We have learnt a tremendous amount and feel very confident that we will be a market leader in Indonesia. New distribution system gone in.We will now push ahead with Airasia Indonesia IPO following the very successful IPO of Airasia Thailand." as of 9.46am today

Share this post


Link to post
Share on other sites

AirAsia scraps $80 million deal to buy Indonesia's Batavia Air

 

 

AirAsia (AIRA.KL), Asia's largest budget carrier, has scrapped a $80 million deal to buy Indonesia's Batavia Air because the move would have carried too many risks, AirAsia Group CEO Tony Fernandes said.

 

Malaysia-listed AirAsia had announced plans in July to acquire Batavia in a bid to expand in Southeast Asia's biggest economy. It would have been AirAsia's first major airline acquisition and would have ratcheted up competition in Indonesia among low-cost carriers such as Lion Air and flag carrier Garuda's (GIAA.JK) Citilink unit.

 

"Our aggressive focus in Indonesia remains and we will push our Indonesian IPO plans while still maintaining close co-operation with Batavia Air," Fernandes said in a statement on Monday.

 

"The company's decision was based on a thorough evaluation by many parties into Batavia Air. In our minds, the timing was perhaps not appropriate as it would have induced too many risks and would ultimately be earnings dilutive to our shareholders."

 

Fernandes in the past has expressed caution towards acquisitions, calling them "value-destroying" in an interview with Reuters last year.

 

AirAsia will now collaborate with Batavia Air on other aspects of the aviation business, including a training joint venture to address an expected skilled pilot shortage in Indonesia, the statement said.

 

AirAsia shares were down 0.3 percent in early trade.

 

Source: http://www.reuters.com/article/2012/10/15/us-airasia-batavia-idUSBRE89E01O20121015?type=companyNews

Share this post


Link to post
Share on other sites

Fernandes: Aborted Batavia Air deal not setback

 

SEOUL: The PT Batavia Air acquisition deal is off, but AirAsia boss Tan Sri Tony Fernandes does not see it as a setback for his group.

 

He said AirAsia Bhd would forge ahead and accelerate growth in the world's fourth largest populous country and that AirAsia Indonesia would be listed next year.

 

“Not at all, it is not a setback. The plans were set but we thought we could accelerate them (with the acquisition). (On hindsight) we think management time, the integration, the potential earnings fallout and the huge cash required to turna round Batavia would have been too dilutive.

 

“We will carry on with our plans for organic growth and the potential of growth in that market is huge,” he told StarBiz.

 

Asked if he would look to acquire another airline to grow in scale and size to compete to tap the 260 million population, most of the whom have not travelled by air before, Fernandes said, “No, I don't think so.”

 

“It seemed like a bonus at the time and decided to go for it. We already have our mind set on all the things that we are doing in Asia, potentially setting up (joint ventures) in (South) Korea, Myanmar, India.

 

“With all that is happening, we are happy and do not want management to be bogged down as an acquisition of this nature can be very time consuming. We felt it is best to spend time doing other things,” he said.

 

On Wednesday, AirAsia and its Indonesian partner PT Fersindo Nusaperkasa dropped plans to buy domestic carrier Batavia Air as the three companies failed to reach an agreement.

 

“We will continue to seek strategic partners to develop our business,” Batavia Air chief executive director Yudiawan Tansari is believed to have said.

 

Fernandes said AirAsia would still maintain a close relationship with Batavia despite the failed deal.

 

AirAsia said in July that it planned to buy a 49% stake in closely held Batavia Air, while Fersindo would buy the balance 51% stake. The companies were expected to pay a total US$80mil (RM245mil) for Batavia Air.

 

From the onset, the deal faced hurdles such as regulatory issues.

 

“It was not going to be an easy transaction; it was like going against the grain of normal behaviour of growing organically.

 

“But we came out of this position feeling good and strong in Indonesia, and certainly are on the right track to accelerate growth in Indonesia with additional planes.

 

“We are confident of what we need to do to grow market share,” Fernandes said.

 

He continued that AirAsia “shareholders should be pleased that we did not rush through anything. We evaluated carefully. Timing was also not appropriate as it induced risks and was earnings dilutive.”

 

Separately, he said three initial public offerings (IPOs) had been planned for next year. Other than AirAsia Indoesia and AirAsia X, Tune Insurance will also be listed.

 

He would not say how much each company would raise but bankers are looking at US$500mil (RM1.5bil), of which RM700mil will be raised by AirAsia X.

 

The listings are for the units to expand, as it is easier to raise capital in the capital markets.

 

“For AirAsia X, an IPO is the next step and we can expand quickly when it is public-listed rather than being private,” he said at a press conference earlier.

 

Asked if he would take Tune Group private, Fernandes said, “It is not for listing, but it is an interesting thought. It has a fantastic collection of inter-related companies, though it is not a conglomerate. Tune Group is all about low-cost businesses.

 

“It is logical and it has crossed my mind. Actually, I just sent an email out for them to look at the numbers, though I have many ideas (running through my mind all the time),” he said.

 

Source: http://biz.thestar.com.my/news/story.asp?file=/2012/10/15/business/12172202&sec=business

Share this post


Link to post
Share on other sites
Sign in to follow this  

×
×
  • Create New...