Home MarketsAsia AirAsia unit heading for Nasdaq listing after SPAC deal

AirAsia unit heading for Nasdaq listing after SPAC deal

by SuperiorInvest

AirAsia aircraft are pictured on the tarmac at Kuala Lumpur International Airport in Sepang on January 8, 2024. Malaysian conglomerate Capital A intends to sell its low-cost airline business to mid- and long-haul subsidiary AirAsia journey, in an important consolidation of the country's airline industry. .

Arif Kartono | afp | fake images

AirAsia is set to list its brand management unit on the Nasdaq after finalizing a SPAC merger, as it bets on the appeal of franchising and licensing opportunities to a U.S. audience not yet widely familiar with the low-cost carrier.

Tony Fernandes, founder and chief executive of Malaysia-based Capital A Bhd.'s AirAsia, which owns the short-haul airline and related units including the brand business, told CNBC this week that he would look to raise awareness about the potential of the almost 700 countries of Southeast Asia. million inhabitants and beyond.

“We chose the United States because Americans understand brands better than Southeast Asian markets,” Fernandes said, acknowledging that the AirAsia brand itself is not well known in the United States.

“My job is to get investors excited about the growth potential of our brand… and also being in a very interesting part of the world, with geopolitics, ASEAN has received a lot more attention.”

Brand licensing opportunities could include hotels, mobile services and airlines in markets such as South Asia and Africa, where AirAsia does not have subsidiaries, Fernandes said.

The deal values ​​the new company, Capital A International, at $1.15 billion, according to a statement Wednesday. The company will also consider acquisitions and licensing for its 14 other brands.

In 2001, Fernandes bought the then-failed airline AirAsia from the Malaysian government for 1 Malaysian ringgit (about 20 cents) and 40 million ringgit in debt. The low-cost airline has grown to currently have a fleet of more than 240 aircraft.

Fernandes is embroiled in a broader battle to lift Capital A out of the financial distress it received from Malaysian regulators during the pandemic and secure capital injections to drive further growth.

An important part of that is its plan to sell AirAsia's core short-haul aviation business, which comprises several regional subsidiaries, from Capital A to its Malaysia-listed sister company Air Asia . That will create a unified Air Asia Group, Fernandes said, which is targeting a capital raise of $400 million, according to Reuters.

Subject to regulatory approval, the deal closed Wednesday with Aetherium Acquisition Corp., a special purpose acquisition company, or SPAC, will result in Capital A International listing on the Nasdaq stock exchange. A SPAC is a publicly traded company that was formed solely to merge with or acquire another company, giving it a faster path to a stock market listing.

Tony Fernandes, CEO of AirAsia.

Bloomberg | fake images

SPACs experienced a surge in popularity in 2020 and 2021, amid frenetic market activity at the height of the Covid-19 pandemic. That flow slowed sharply in 2022, as numerous companies failed to meet lofty expectations and as market volatility and interest rates began to rise.

“Why a SPAC? I really see it as a reverse listing in the United States,” Fernandes said. “SPACs get a bad rap because a lot of them were, I'm going to be, outright, crazy business schemes, sending people to the moon… We're generating real cash flow, real profits,” she added.

On a smaller scale, AirAsia's path will mirror that of the Singapore-based, Southeast Asia-focused company. Graba “super app” service, which began trading on the Nasdaq in December 2021 after closing a SPAC merger.

The SoftBank-backed company has faced turbulent times, with shares falling on its first day of trading and languishing ever since.

“Whether we like it or not, Grab has led the way in proving that a Southeast Asian company can list in the United States,” Fernandes said. “It won't be a walk in the park, we will have to work [for] “But while we may not be as well known in the United States, the concept of what we are doing is better understood in that part of the world.”

Source Link

Related Posts