King Power takes stake in Thai AirAsia

Dino D'Amore
By Dino D'Amore June 15, 2016 22:40

King Power takes stake in Thai AirAsia

King Power, the Thai duty-free conglomerate and owners of City football club in the UK, confirmed yesterday that it had bought a $225 million stake in Thai Air Asia.  Thai Air Asia is 55% owned by Asia Aviation, a Thai company, while the rest is owned by Tony Fernandes’ Air Asia group. King Power has purchased 39% of Asia Aviation from its CEO Tassapon Bijleveld for 7.945 billion baht, making it the second largest shareholder in Thai Air Asia. Bijleveld will keep 5% of the shares and stay on as CEO, King Power said in its statement, with the rest of Asia Aviation’s stock owned publicly.

The purchase allows King Power’s billionaire owner Vichai Srivaddhanaprabha to further tap into Thailand’s booming tourism industry and expand beyond his duty-free and hotel portfolio. “We are in the same business, the tourism business, which is a key factor in growing the Thai economy,” Vichai told reporters, adding that he expects Thai Air Asia to continue growing by 20-25% a year.

In its statement announcing the deal, King Power said it was able to snap up the shares at a price “substantially lower” than the market rate because local airlines must legally be more than 50% owned by Thais.”Given the restrictive nature of such rules, there are only a handful of Thai individuals who, realistically, would be interested in and could afford the purchase,” the statement said.

Asia Aviation’s share price was up 1.67% to 6.10 baht on the news.

Last year Thai Air Asia carried 14.8 million passengers and plans to serve 16.9 million travelers in 2016. It made a record $30 million net profit last year.

Dino D'Amore
By Dino D'Amore June 15, 2016 22:40