AirAsia X weighs IPO timing

AirAsia X Bhd, the long-haul arm of Asia’s biggest budget carrier, is weighing the timing for a planned initial public offering that may help it raise about US$250 million, as Malaysia prepares for general elections.

"We don’t have a specific date yet for the general elections," chief executive officer Azran Osman-Rani said in an interview today from Kuala Lumpur with Bloomberg Television’s Rishaad Salamat. "We are going to be guided by the investment bank advisers whether or not it’s really an issue or whether it’s been priced in."

The five-year-old airline plans to use the IPO proceeds to boost its fleet, add flights and destinations, according to Azran. An IPO by AirAsia X would be the second of three proposed listings by affiliates of AirAsia Bhd as the Malaysian group raises funds to accelerate expansion.

The listing document, filed in November, is being resubmitted to include earnings for the six months through December, Azran said today.

Shares of AirAsia gained 1 per cent to close at RM2.96 in Kuala Lumpur, outperforming a 0.6 per cent advance in the benchmark FTSE Bursa Malaysia KLCI Index.

AirAsia X, based in Sepang, Malaysia, plans to raise about US$250 million from the IPO, a person familiar with the sale said in November, declining to be named as the information was confidential.

Prime Minister Datuk Seri Najib Razak must dissolve parliament by April 28 for polls to be conducted within 60 days.

Asia Aviation Pcl, the parent of Thai AirAsia Co, was the first to sell shares in Bangkok last year.

AirAsia’s Indonesian unit will also go public in the third quarter, Group chief executive officer Tan Sri Tony Fernandes said last month.

Proceeds from the share sale will help finance new aircraft as AirAsia X takes delivery of seven Airbus SAS A330 planes this year, adding to an existing fleet of 11 aircraft, Azran said in a separate interview today. The carrier, which dropped routes to London and Paris last year to focus on Asia and Australia, may add destinations including Adelaide in Australia and Xian, Chongqing and Wuhan in China.

It may also fly to Nagoya in Japan and Busan in South Korea, he said.

The benchmark FTSE Bursa Malaysia KLCI Index has declined 2.7 per cent since hitting a record high on January 7 amid speculation the general election may result in the ruling coalition losing seats.

"At some point we’re not going to be able to keep holding on and we just have to move ahead," Azran said.-- Bloomberg