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Fernandes offering of 33% of AirAsia X to public ideal

Publication Date : 05-02-2013

 

AirAsia Bhd group chief executive officer Tony Fernandes said he would, ideally, like to offer a larger portion, or 33 per cent, of long-haul low-fare airline AirAsia X shares to the public when it eventually lists.

“I want every one to be able to buy shares. AirAsia is essentially made up of the common man on the street. I always talk to everyone.

“I am one of the few CEOs who goes and meets every single person. The feedback I get is that they can't get shares, but want to be involved in it. So, I would like to do 33 per cent,” Fernandes told StarBiz.

For AirAsia X's flotation, it would be listing about 30 per cent of its shares. So a 33 per cent allocation for the public portion would effectively translate into 10 per cent of the entire paid-up capital.

“The common man flies with us, so should get some reward for flying with us. The problem now is that there is not enough shares in issue. That's why I want to do 33 per cent. It's not much too it's basically like 20,000 people taking 100 shares each,” Fernandes said.

Last year, Malaysia saw the mega listings of Astro Malaysia Holdings Bhd and IHH Healthcare Bhd, where people complained about the small number shares offered to the public compared with the total offered for the listing exercises.

In Astro's case, it offered 1.518 billion shares, equivalent to 29.2 per cent of its enlarged capital. Of that, some 83 per cent was allocated to Malaysian and foreign institutional investors and select investors, including bumiputra investors, and cornerstone investors, meaning 17 per cent was allocated for the public offer.

As for IHH, of the combined 2.23 billion shares, 1.39 billion were for cornerstone investors and 498.01 million for local and foreign institutional investors. Retail investors were allocated 349.15 million shares or 15.7 per cent of the listing offer.

In Tune Ins Holdings Bhd's case, which will be listed on February 22, some 210 million new shares are up for sale. Some 41.34 million shares or 20 per cent have been allocated for retailer investors.

Typically, where initial public offerings are concerned, investment bankers favour foreign investors and local institutions over the retail investor.

The rationale? The presence of cornerstone investors can better ensure the success of the IPO. Cornerstone investors are longer term in nature and will likely not sell for an extended period of time.  

 

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