Soaring oil prices and jittery markets don’t seem to be standing in the way of Asian low-cost airlines: AirAsia Bhd. has announced details of the initial public offering of its Thai unit, and more listings wait on the runway.
Thai AirAsia, 49%-owned by AirAsia and 51%-owned by its Thai management, is seeking to raise US$150 million or more by selling at least 25% of the company in an IPO, the company said on Monday. That would follow last month’s IPO by state-owned PT Garuda Indonesia, which raised US$529.7 million, and offerings by Cebu Pacific of the Philippines and Singapore’s Tiger Airways in October and January last year, respectively.
AirAsia has also expressed interest in listing its Indonesian unit in an IPO. Group Chief Executive Tony Fernandes said last year that AirAsia’s goal was to list its affiliates in their home markets, and has also said he’s considering a secondary group listing in Hong Kong or the U.S. The parent company is currently listed in Malaysia.
Things didn’t bode well for PT Garuda Indonesia’s IPO from the start. Sure enough, Indonesia’s flagship airline has lost some serious altitude in its public debut in Jakarta on Friday.
Garuda shares were down 20% from its listing price on its first morning of trading, as low as 580 rupiah a share compared to a listing price of 750 rupiah. Pandu Djajanto, a deputy to the Minister of State Enterprises Affairs, said Friday that nearly half of Garuda’s IPO was absorbed by underwriters, which also include UBS AG and Citigroup Inc.
Next stop: Hong Kong?
There’s a new share offering that the world’s stock markets can fight over.
Outspoken AirAsia chief executive Tony Fernandes told Dow Jones Newswires on Friday that he hopes to list the discount airline’s shares in either the U.S. or Hong Kong by the end of the year.
“We certainly see a lot of demand for our shares,” he said , adding that plans are in very early stages right now as the airline “hasn’t even appointed bankers yet.”It’s hard to divine from Mr. Fernandes’ comments where he’s leaning: Hong Kong or New York. AirAsia already flies to Hong Kong, so that’s one thing pulling for Asia’s financial capital. But getting AirAsia’s name in New York will probably appeal to Mr. Fernandes’ plentiful store of ambition.
It’s hard to divine from Mr. Fernandes’ comments where he’s leaning: Hong Kong or New York. AirAsia already flies to Hong Kong, so that’s one thing pulling for Asia’s financial capital. But getting AirAsia’s name in New York will probably appeal to Mr. Fernandes’ plentiful store of ambition.
Indonesian carrier PT Garuda Indonesia has waited over a decade to go public, but has its window of opportunity passed?
The state-owned airline, which aims to raise US$500 million in an IPO, began pre-marketing on Tuesday. Sources close to the deal say the company will be in Singapore on Thursday and Friday this week, and Hong Kong next Monday and Tuesday for its roadshow.
Following Monday’s heavy selloff, shares in Jakarta have stabilized somewhat on Tuesday as investors bargain-hunt, but foreigners are clearly spooked by the reluctance of the government to raise interest rates to clamp down on inflation.