Air Asia Indonesia Flies in the Back Door Listing

Photo by AirAsia Indonesia

JAKARTA (TheInsiderStories) – Low-cost flight carrier PT AirAsia Indonesia (AAI)will soon offer shares through a ‘back-door listing’ on the Indonesia Stock Exchange (IDX). The target of the backdoor listing is PT Rimau Multi Putra Pratama Tbk (CMPP), an Indonesian-based firm engaged in coal trading (and formerly known as PT Centris Multipersada Pratama Tbk).

CMPP obtained the approval of shareholders for the move on Oct. 18.

The new shares to be issued amount to 13,646,388,139, at an exercise price of Rp 250 per share. This means that CMPP corporate value is appraised at Rp 3.41 trillion (US$252.60 million). Of these fresh funds, as much as 76 per cent will be allocated to buy up AirAsia Indonesia shares worth Rp2.60 trillion.

Fersindo Nusaperkasa (FN) and AirAsia Investment Ltd (AIL) will act as standby buyers. Following the rights issue, CMPP ownership will be adjusted as follows: RMI 1.55 per cent, public 0.48 per cent, FN 49.96 per cent and AIL 48 per cent.

Upon completion of the corporate exercise, CMPP will become the new holding company of AirAsia Indonesia, whereby AIL and its Indonesian partner FN will become the major shareholders in CMPP, which now flies 51 per cent of AirAsia Indonesia shares. Currently, CMPP is controlled by PT Rimau Multi Investama (RMI) with 76.24 per cent share ownership.

“Planned proceeds will be used to purchase Rp 2.6 Tn in perpetual securities or bonds of Air Asia Indonesia, through the scheme” explained Donny P. Pratono, Commissioner of CMPP.

He said the company acquired the AAI holding as there are bright prospects for future air travel. Air Asia Indonesia will effectively become a subsidiary of CMPP at the end of this November. In line with the transaction process, CMPP also will divest two subsidiaries to their affiliated companies.

Based on a public announcement at the Malaysian Stock Exchange on Tuesday (29/8), its Malaysian AirAsia Bhd unit and its wholly-owned unit,  AAIL reported has decided to partially dispose and convert its perpetual securities investments in its Indonesian unit to CMPP.

Previously, AirAsia Group CEO and founder Tony Fernandes said proceedings from the IPO would be used to fund route expansion and enlarge the airline’s Indonesian fleet. There had been reports that Indonesia AirAsia would be merged with sister company Indonesia AirAsia X before the listing to solve issues regarding negative equity. It is unclear whether the merger plan is still on the table.

Tony said the aim of AirAsia is to add two more aircraft by the end of this year to its currently operating 22 fleet. He estimated the airlines will be able to add six to eight more aircraft by next year. The Jakarta-based airline aims to operate some 40 to 42 Airbus A320 aircraft by the end of 2019.

Minister of Tourism Arief Yahya said the Indonesian Government encourages AirAsia to create more new routes to attract more foreign tourists to Indonesia. Currently, AirAsia Indonesia brings in around 25 per cent of total foreign tourists each year.

The government targeted to bring 15 million foreign tourist to visit Indonesia in 2017. The government set target to bring 2 million Chinese tourists this year and 10 million tourists in 2019.

Writing by Linda Silaen, Email: linda.silaen@theinsiderstories.com