By Ashley Erika O. Jose, Reporter
AIRASIA PHILIPPINES has revived its initial public offering (IPO) plans, targeting a public listing inside the following 12 months to fund its expansion, in line with the corporate’s top executive.
“My confidence within the Philippines has grown because finally the airports are being sorted out. I feel now with the airport development that is occurring in Manila, we are able to begin to see Manila as one among our vital hubs,” AirAsia Group Chief Executive Officer (CEO) Anthony Francis Fernandes said during a briefing on Wednesday.
Capital A Berhad, the owner of the AirAsia Aviation Group, recently secured approval from the Malaysian stock exchange for its regularization plan to exit its PN17 status, a classification issued by the Malaysian bourse for corporations in financial distress.
As a part of its restructuring, Capital A will deal with non-aviation businesses while retaining an 18% stake in aviation. Its aviation business can be under AirAsia X Berhad (AAX).
“We’re exploring having a direct listing on the Philippine Stock Exchange. We could be selling 20-30% once aviation is sorted out,” Mr. Fernandes said, adding that the corporate is more desirous about a public listing than selling to a non-public investor.
AAX earlier announced a mutual agreement with Capital A to increase the timeline for completing the proposed acquisition of the group’s aviation business.
Last 12 months, Capital A Berhad disclosed that it had entered right into a non-binding agreement with its unit, AirAsia X, for the sale of its aviation businesses — AirAsia Berhad and AirAsia Aviation Group Ltd.
AirAsia Philippines’ planned listing on the local bourse would help fund its expansion, as the corporate is banking on the country’s growth trajectory.
“We’re going to be modernizing the fleet with our orderbook. We now have taken 14 planes this 12 months. A few of those planes can be coming to Manila,” Mr. Fernandes said, adding that apart from Manila, the corporate can be expanding its hubs in Cebu.
He said AirAsia goals to strengthen Manila as a hub and attract travelers to make use of it as a transit point for other destinations.
“Geographically, the Philippines really suits beautifully. So, my vision is that even Japanese, Koreans, and Chinese would fly right down to Manila and use us to the west coast of America and east coast of America and other [destinations],” he said.
Asked for comments, Globalinks Securities and Stocks, Inc. Head of Sales Trading Toby Allan C. Arce said AirAsia has a powerful brand in Asia, and an IPO could be attractive to potential investors.
“AirAsia Philippines’ plan to go public is intriguing… It signals its ambition to expand and solidify its position within the regional markets,” Mr. Arce said in a Viber message on Wednesday.
Nonetheless, Mr. Arce noted that it will be higher for AirAsia Philippines to evaluate market sentiment before proceeding with the IPO.
“IPOs often generate interest in periods of market optimism. If investor sentiment around travel and leisure stocks stays high, it could draw substantial interest,” he said.
“For an AirAsia IPO to succeed, it will first need to ascertain a powerful record and trajectory of profitability,” China Bank Capital Corp. Managing Director Juan Paolo E. Colet said in a Viber message.
He added that investors would also need to see sustained growth in tourism and the economy to support the airline sector’s fundamentals.
“An IPO could be more viable when equity market conditions are more attractive. Given current circumstances, perhaps the earliest window for them to list is 2026,” Mr. Colet said.
