AirAsia X Bhd is starting to feel out investor interest for the initial public offering for the long haul unit of the largest budget carrier in Asia. The IPO is projected to be valued at US$300 million.
The plan offers to 790.1 million shares and is forecasted to raise between US$250 million and US$350 million. The figures were reported by Bloomberg News through a term sheet obtained from regulatory authorities. The company has scheduled trading to commence at the Kuala Lumpur stock exchange by July 10.
The proceeds of the IPO would help in the purchase of seven new Airbus SAS A330 planes this year. According to CEO Azran Osman-Rani, the move is expanding to fight off competition from Singapore Airlines' Scoot, its long distance budget airline that took off last year to ride the crest of the increased travel demand in the region.
This is the second of three IPOs to be listed by the affiliates of AirAsia Bhd of Malaysia. This is the means that the group would be accelerating growth and expansion. Aside from theairline purchase, the carrier would be adding on an Indian unit through a venture with the Tata Group.
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