AirAsia Says That "There Is A Huge Appetite For Our Shares..."

Posted yesterday. Comments On AirAsia Stock Sale

On today's Business Times: AirAsia eyes RM500m

• AirAsia Bhd (5099) is looking at raising about RM500 million by placing out up to a fifth of its shares to private investors to pay off some debt, says its chief executive officer.
  
  AirAsia's total debt stood at RM6.9 billion as at the end of March 31 2009.
  
  "Local and foreign investors (demand) drove us (to placing out more shares). There is a huge appetite for our shares, and obviously as an airline, it is always good to have cash. Liquidity is also good in the market now and so we decided on a private placement," AirAsia Bhd chief executive officer Datuk Seri Tony Fernandes (pic) said.
  
  He said the budget carrier has yet to hire bankers for the placement and has not decided on whether it will stagger the placement (10 per cent now and another 10 per cent later) or do an outright 20 per cent placement.
  
  This is the second time AirAsia is placing out shares after its initial public offering in 2004.
  "If there was concern on AirAsia, I think the prime minister's (Datuk Seri Najib Razak) announcement on wanting to create a level playing field has removed any doubts that equity investors may have had on AirAsia's chances. It is a great environment to raise equity," Fernandes said.
  
  Fernandes was speaking on the sidelines of Invest Malaysia 2009 in Kuala Lumpur yesterday.
  
  "It is what I have been asking for, for seven years. Today will really unleash the enormous potential that AirAsia can achieve and we are thrilled by the prime minister's speech," he said in response to Najib's call for more level playing field between GLCs and private firms.
  Besides calling for greater competitiveness and performance from GLCs such as those in electricity and airport businesses, Najib also stated that the government will not help GLCs to the detriment of private sector competition.
  
  Fernandes has been lamenting on the protective nature of the aviation industry in Malaysia since the setting up of AirAsia in 2002, starting with the placement of Firefly, a unit of Malaysia Airlines, in Subang, to the aeronautical charges imposed by Malaysia Airports Holdings Bhd.
  
  He also called for regulation of monopoly industries to ensure that there is transparency in pricing and costing.
  
  Fernandes said the key is not really to have competition within the country but to have competitive industries that can go global and create bigger opportunities.

Hmm... "There is a huge appetite for our shares..." ?????

Flashback 2004. AirAsia IPO share price falls 17% short

• AirAsia's initial public offering (IPO) will reportedly raise less than expected due to the lack of interest in the high price set by the company for its shares.
  
  Malaysia's leading low-cost airline set a price of MYR1.51 for institutional investors and MYR1.40 for retail investors but sources close to the deal were quoted as saying on Friday (29 October) that institutional investors will only pay MYR1.25 per share, a drop of 17%, and retail investors will pay MYR1.16 per share. The IPO is now expected to raise USD226m.
  
  Fund managers said that they were not surprised by the figures as high oil prices and competition from Tiger Airways in the region led to concern from investors. Despite the IPO falling below AirAsia's own estimates the shares still value the company at 16.7 times over its forecast earnings for the year ending June 2005, reports Reuters.

On another article AirAsia IPO takes off

• November 23, 2004
  
  Shares in Asia's only major listed budget airline, Malaysia's AirAsia, jumped 12 per cent in their debut on Monday, as investors bet that cheap fares would drive strong growth in air travel across the region.
  
  AirAsia, which wants to be Asia's leading low-cost carrier and is negotiating to acquire up to 80 new planes, had priced its US$226 million (HK$1.763 billion) initial public offer below its own indicative price last month, ensuring the shares went to market oversubscribed.
  
  ``We are quite happy with what we have got,'' Chief Executive Tony Fernandes said when asked if he was disappointed with the IPO price. ``Our main focus is not on the [share] price; it's on delivering the numbers,'' he added. AirAsia has forecast net profits to triple between 2003-04 (July-June) and 2004-05.
  
  The stock, sold to institutions at 1.25 ringgit (HK$5.90), hit a high of 1.45 ringgit in Kuala Lumpur before closing up 12 per cent at 1.40, giving AirAsia a market value of about US$860 million. This was still below the original indicative price of 1.51. ( long article.. click the above link to read in full)
  

AirAsia's stock performance since listing.

And how did AirAsia did after listing?

The extremely optimistic tripling of profits never did happen. AirAsia failed to deliver what it had promised during its IPO.

Do refer to this old posting AirAsia.

Huge appetite for their shares???

I really do wonder.