On heels of buyout news, AirAsia has huge goals in long overdue IPO

Budget carrier AirAsia Philippines’ new majority shareholder is targeting a $1-billion (P51 billion) valuation when it goes public by late 2020 or early 2021.

Rep. Michael “Mikee” Romero, whose family controls the budget airline, said operator AirAsia Inc. could sell at least 20 percent and raise $200 million in an initial public offering (IPO).

Romero did not say how much the company was worth although he pointed to its aggressive expansion plans, which included doubling its fleet to 50 aircraft. It currently has 24 Airbus A320s.

He said an IPO would “accelerate the business plans of AirAsia Philippines,” which was targeting to post $1 billion in revenues in two years.

AirAsia Philippines still trails its larger domestic rivals Philippine Airlines (PAL) and Cebu Pacific in terms of market share and fleet size.

PAL’s operator, PAL Holdings, has a market value of P95 billion while Cebu Air Inc. is valued at P55.3 billion on the Philippine Stock Exchange.

AirAsia Philippines had floated plans for a public listing as early as 2015. This was delayed due to a mix of factors, including volatile market conditions and losses from operations.

But the company is poised for a financial turnaround this year. Romero said revenues would hit P29 billion, up about 50 percent, while net operating income would amount to P2 billion, reversing a loss in 2018.

AirAsia Philippines chair Joseph Omar Castillo said the final timing of the IPO would depend on an ongoing recapitalization exercise.

“There’s still a number of things to do on the corporate side to prepare this company for an IPO,” he said.

So far, Castillo said AirAsia Philippines was looking to launch its maiden share sale in the third quarter of 2020 or in early 2021.

The Romero family, through privately held F&S Holdings, recently cemented control of AirAsia Inc. This followed the acquisition of the 15.6-percent stake in the carrier from Antonio “Tonyboy” Cojuangco, AirAsia Philippines’ last local partner.

Following that transaction, F&S Holdings now owns about 60 percent of AirAsia Inc. while the rest is held by the AirAsia Group’s Malaysian founders.