AirAsia founders 'in bid to take firm private'

SINGAPORE • The founders of Asia's No. 1 budget carrier AirAsia are sounding out investors to take the company private in a management-led buyout, after its shares took a beating this year following a critical research report, people familiar with the matter said.

AirAsia boss Tony Fernandes and his long-time business partner, Mr Kamarudin Meranun, are working with banks to secure financing for the transaction, which could be launched over the next few months, said the sources, who did not want to be identified as the discussions are confidential.

Obtaining financing will be key for the deal to succeed, they said.

An AirAsia spokesman had no immediate comment when contacted by Reuters yesterday.

The airline's market value has fallen 40 per cent to RM3.51 billion (S$1.1 billion) since Hong Kong- based GMT Research questioned AirAsia's accounts in a report in June.

The report came as AirAsia was under pressure to turn around its loss-making affiliates and was being squeezed by industry overcapacity in a low-margin business.

Mr Fernandes, the group chief executive officer who has led the airline's rise from a two-plane operation in 2002 to a billion-dollar business, has steadfastly defended the company's finances and outlook, and said the market was undervaluing it.

Tune Air, jointly owned by Mr Fernandes and Mr Meranun, owns about 19 per cent of AirAsia.

The plan to take the airline private comes a decade after it was listed on the Kuala Lumpur Stock Exchange, priced at RM1.25 for institutional investors, around where it was trading yesterday.

REUTERS

A version of this article appeared in the print edition of The Straits Times on October 07, 2015, with the headline 'AirAsia founders 'in bid to take firm private''. Print Edition | Subscribe