Shifting markets lead to AirAsia X IPO going off at low end of range

By Victoria June 24, 2013 11:24

Shifting markets lead to AirAsia X IPO going off at low end of range

AirAsia X has raised M$987.7m (US$310m) from its Malaysian initial public offering (IPO) after fixing the price near the bottom of the indicative range. The deal exceeds Cliq Energy’s $118m offering in April as the biggest IPO in Malaysia so far in 2013. The airline IPO attracted strong demand and was in the end oversubscribed mainly through Malaysian domestic institutional interest. Around 70% of the institutional tranche went to local investors, with the rest allocated to international investors.
The bookbuilding was expected to continue until today but the order books were closed last Thursday due to strong demand and market conditions. The price was also fixed to limit the negative impact from the stock market volatility post the Federal Reserve QE announcement last week (covered here on Thursday).
The offering comprised 790.1 million shares, which represent 33.3% of the enlarged share capital. The shares were marketed at a price between M$1.15 and M$1.45 each, but eventually priced at M$1.25. The IPO consisted of 75% primary shares and 25% secondary shares. Some 68.1% of the shares were targeted at institutions, while the remaining 31.9% were offered to retail investors.
The IPO includes a greenshoe option of up to 15%. Such an option gives the underwriter the right to sell investors more shares than originally planned by the issuer. This could increase the size of the deal to as much as $355 million if fully exercised. The shoe is made up of all secondary shares.
The selling shareholders were Aero Ventures, Orix Airline and Manara Malaysia I. As a result of the IPO they will see their combined stake reduced to 47.2% from 74.0%. Investment holding company Aero Ventures, which is controlled by AirAsia CEO Tony Fernandes and his partners, owned 52.2% of AirAsia X before the transaction, while Orix Airline and Manara held 10.9% each.
The final price translates into a price-to-earnings ratio of 20.3 times for 2013, and 7.8.
CIMB, Credit Suisse, and Maybank were joint global coordinators for the IPO, and Barclays, BNP Paribas, Citi, CLSA, HSBC, and Morgan Stanley were bookrunners.
The stock will start trading on July 10.
Paris 2013 round-up
Refer to Airline Economics issue 15 for a full roundup of the Paris air show but our take on the show in extreme brevity is:
There were 1,079 “aircraft orders” most of these orders were conversions of previous announcements or were LOIs or MOUs and thus I have to ask were they really orders. The engine side of the show was where the real order action was and this was a very big show for engine orders, one of the largest ever. The most impressive showing of Paris 2013 on the aircraft side was maybe Embraer with its E2s and ATR.

By Victoria June 24, 2013 11:24
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