AirAsia consolidates biz under AirAsia Group

AirAsia Bhd listing to be transferred to AirAsia Group

By DASHVEENJIT KAUR / Pic By ISMAIL CHE RUS

Shareholders of AirAsia Bhd (AAB) have given the nod for the massive restructuring and the transfer of the listing status of the budget carrier to the new holding company AirAsia Group Bhd (AAG).

The reorganisation at Asia’s largest frill-free airline, which is expected to be completed by March 2018, would see moves to consolidate various affiliates under one roof.

AirAsia’s digital- related services and intellectual properties would also be consolidated into five separate business segments.

Besides the Malaysian operation, the local budget carrier also has five affiliates in the Philippines, India, Thailand, Indonesia and Japan.

Restructuring at the carrier has been expected, as the company which started in 2001 with two aircraft now flies to about 130 routes and owns over 150 planes.

“It is big day for me and AirAsia as 99.99% of our shareholders have approved the formation of AAG and it has been something which I have been hoping for,” said group CEO Tan Sri Dr Tony Fernandes after AAB’s EGM and court-convened meeting in Sepang yesterday.

Fernandes will remain as the group CEO for the soon-tobe- listed AAG.

He said the reorganisation marked another step towards the group’s aim of creating a single holding company within the Asean region.

The move, said the aviation tycoon, would streamline the structure of its operations and enable investors to understand the company as one economic unit.

“We hope to consolidate all of our Asean affiliates very soon, with Thailand being the next.

“This will turn AAG to be a 100% shareholder of AAB and we are also planning to turn AAB into a private entity, or AirAsia Sdn Bhd,” he said.

Fernandes believes the exercise will facilitate future spinoff of its operations and unlock the value of AirAsia’s investment in its subsidiary, joint ventures and associate companies.

The largest regional budget carrier by fleet proposed to implement an internal reorganisation by way of a members’ scheme arrangement in August 2017.

The reorganisation will see the newly incorporated investment holding company, AAG, to assume the Main Market listing status of AAB.

AAB announced in October 2017 that it has received approval from Bursa Malaysia Securities Bhd for the corporate exercise.

AAG will take over AAB and assume the latter’s listing status as an investment holding entity under a one-for-one share swap deal, while AirAsia will focus on its airline operations.

This will involve the exchange of 3.34 billion ordinary shares in AAB, with new ordinary shares in AAG, on the basis of one new AAG share for one existing AAB share.

AAB reported a 42.9% increase in earnings of RM505.32 million for its third quarter ended Sept 30, 2017 (3Q17).

Its revenue rose 45.1% from RM1.68 billion to RM2.44 billion in the same period last year.

AAB, with a market capitalisation of RM12 billion as of yesterday, closed 0.28% or one sen lower at RM3.58.