Just over 18 months after a group of investors took over Malaysia's then loss-making AirAsia for just 1 ringgit (26¢) plus the assumption of half its debts, a 26% stake has been sold in deals that value the low-cost airline at $100 million.
Three foreign strategic investment groups bought into AirAsia late in June for a total of $26 million. Funds will be used to help expand the fast-growing airline with the purchase of four Boeing 737-300s.
AirAsia was acquired by a group known as Tune Air from local conglomerate DRB-Hicom in December 2001 and was relaunched a month later as a low-cost domestic operator.
Tune Air, which was set up by local investors, including the airline's chief executive Tony Fernandes, acquired 99.25% at the time and now holds 73.41% of the enlarged share capital.
The three new investors are Islamic Development Bank (IDB) Infrastructure Fund with 10%, Crescent Venture Partners with 9%, and Deucalion Capital II with 7%. Malaysia's Mofaz Air holds the remaining shares.
IDB Infrastructure Fund is a global private equity fund that includes the governments of Brunei, Saudi Arabia, Bahrain and a Malaysian consortium. Crescent Venture Partners is an investment company which lists as its investors family offices, financial institutions and public/private partnerships in Saudi Arabia, Kuwait and the United Arab Emirates. Deucalion Capital is a private equity fund specialising in aviation and advised and funded by the Frankfurt-based DVB Bank.
"AirAsia's new partners bring to the company an ideal combination of strategic value added and increased financial strength," says the carrier.
AirAsia has expanded rapidly over the past 18 months and plans to boost its fleet to 18 737-300s over the next year with a mixture of leases and acquisitions. The airline operates flights from Kuala Lumpur to destinations within Malaysia and is preparing to start international services this year.
AirAsia has been profitable since its relaunch and paid off all its debts last year.
Source: Airline Business
