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AirAsia explores India unit IPO, seeks partner for services business

Reuters  |  SINGAPORE 

By Jamie Freed

(Reuters) - Malaysia-based Bhd is considering an initial public offering for its Indian unit and seeking a partner for its services business, the carrier's executive said on Wednesday.

This is the latest in a series of asset monetisations being undertaken by the group, which this week received shareholder nod for a reorganisation to make Group Bhd the listed holding company for assets across

has already completed a backdoor listing of Indonesia TBK PT and finalised a S$119.3 million ($89.38 million) joint venture for its ground-handling business with Singapore's Its Philippine unit is looking to raise up to $250 million via an IPO in mid-2018.

will seek approval at the next board meeting to pick a to start a preliminary process for an IPO, Fernandes posted on on Wednesday.

While analysts are "giving zero value to India", the unit is a "very valuable asset with huge growth potential", he said in separate tweets, adding the subsidiary "was not far from 20 planes and a potential IPO".

According to Indian regulations, airlines need to have a fleet of at least 20 aircraft to fly on international routes.

India, a joint venture with India's conglomerate, had 14 planes at end-2017. Its revenue last year was expected to double to 12 billion rupees ($188.44 million) and climb to 18 billion rupees in 2018.

The fast-growing Indian venture reported a net loss of 164 million rupees in the quarter ended September, according to AirAsia's latest accounts.

"is still incurring start-up losses and in negative equity so it is challenging to ascribe much value to the business at this point," said Corrine Png, the firm

However, she said if the Indian venture grew its fleet to 20 and turned profitable, AirAsia's 49-percent stake could be worth $200 million based on listed Indian

Fernandes said was also in the process of appointing a to find a partner for its shared services centre business, Global Shared Services, which provides accounting services and for its airlines.

But Png said the value of that business would be insignificant, at around 1 million ringgit ($249,563.26).

said it did not have any additional information to share on the plans announced by Fernandes.

The company's strategy involves selling more stakes in non-flying businesses to help fund special dividends, Fernandes said in October.

($1 = 1.3347 dollars)

($1 = 63.6800 Indian rupees)

($1 = 4.0070 ringgit)

(Reporting by in and Ishita Chigilli Palli in Bengaluru; Editing by Himani Sarkar)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, January 10 2018. 10:06 IST