06 November 2012

AirAsia X - Can it be flying higher after IPO?

AirAsia X is going to be listed in Bursa Malaysia, its home base country market, after posting its draft prospectus on the Securities Commission's (SC) website.

To my concern, I would like to know in more detail the prospectus before I can comment on anything. But what I was guessing was that, with current weaker market condition, the IPO price cannot be too high, and I am not sure whether Institutional Investors will buy its ideas, as the low cost carrier market is getting more competitive, especially in emerging market such as Asean countries. I would expects more alliance or rather M&A activities will be going on in later stage, maybe after a few years later.

Below are the paragraphs which I copied from The Edge Malaysia.

Tan Sri Tony Fernandes and Datuk Kamarudin Meranun's long-haul budget carrier AirAsiaX Bhd is targeting a January listing, and is considering setting its indicative initial public offering (IPO) price at about RM1.20 to RM1.40 per share, a financial executive told theedgemalaysia.com.

This values the high-profile AirAsiaX's flotation between RM948M and RM1.1B, of which only 75% will go to the company as 25% of proceeds are from offer for sale of existing shares by key shareholders. 

"The secondary share sale is not included in the RM700M. That is the amount the company will raise," the source told theedgemalaysia.com. 

In mid-October, AirAsiaX chariman Tan Sri Rafidah Aziz told the The Edge Financial Daily that AirAsia X expects to raise about RM700M from its IPO. This was not disclosed in AirAsia X's draft prospectus dated nov 1 posted on the Securities Commission's (SC) website for exposure until November 23.

To view full report, please go to Source: The Edge Malaysia

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