AirAsia mulls US IPO, inflates digital business

AirAsia Group is considering raising at least USD300 million by listing its digital business wing via a special-purpose acquisition company (SPAC) in the United States, chief executive Tony Fernandes told Reuters.

A number of SPACs have approached the group, he claimed in the July 7 interview, and “we have now recruited our auditors to start preparing for an American listing, so that’s very much on the table.”

Multinational financial services company Rothschild & Co has been working on the listing, which could happen in five months, according to Fernandes. Talks with a US company over a USD1 billion loan for the digital business are “near conclusion”, Fernandes elaborated.

The AirAsia (AK, Kuala Lumpur Int’l) parent is also in talks with other potential suitors, including Malaysian and Indonesian private equity firms, he added.

Fernandes’ comments confirm reports in April that the group has been planning to raise funds to expand its digital business unit AirAsia Digital as a means of diversifying its business to offset the crippling effects of the pandemic on international aviation.

Also as previously reported, AirAsia Group plans to raise between MYR2 billion and MYR2.5 billion ringgit (USD480-600 million) in 2021 through a combination of borrowings and equity funding to ensure its survival.

Separately, the Malaysian budget carrier revealed in a stock exchange filing on July 7 that it would buy the Thai business of Indonesian digital payment and ride-hailing firm Gojek in a stock swap. The move will give Gojek a 4.76% stake in the group’s lifestyle platform AirAsia SuperApp. AirAsia will acquire the Thai business in return for USD50 million worth of shares in the platform.

AirAsia SuperApp provides travel, financial, and e-commerce services and is one of three companies under the AirAsia Digital umbrella, the others being fintech firm BigPay and the logistics venture Teleport. On July 1, BigPay announced it had applied for a digital banking licence in Malaysia with “a consortium of strategic partners” – another development signalling a shift in focus at the group towards digital business.