CIMB Research expects that the Asian budget carrier AirAsia Bhd will finalize the sale price of its leasing arm Asia Aviation Capital by the end of next month. The research house said:
The guidance for a valuation of some US$1bil for the entire AAC remains unchanged, and a sale of some 70-80% stake will raise proceeds of around RM1 per share. We have imputed a special dividend of RM1.12 into our target price on the basis of a US$1.2bil valuation and a 70% stake sale.
In addition, CIMB also believes that the incorporation of a new subsidiary Malaysia AirAsia could lead to a separate listing of this carrier, saying:
Assuming a 30% stake sale at 12x P/E on sustainable earnings of RM800mil per annum (ex-leasing profits), AirAsia can realize cash proceeds of 86 sen/share, due to accretion from the current group valuation of around 10x P/E, which will likely be paid as special dividends after the MAA listing.
Finally, CIMB Research also estimated that the sale of AAE Travel and Asia Aviation Centre of Excellence (AACE) could reach a price of 21 sen per share and the proceeds (distributed as special dividends) could go next year.
AirAsia holds a 25% share interest in AAE Travel Pte Ltd, which was valued at $86 million back in 2015 when the first tranche of 25% was sold. It is expected that the balance will be sold to AirAsia joint venture partner Expedia.
When it comes to AACE, AirAsia has a 50% stake in the pilot training school, which should be sold later this year to another joint venture partner, CAE, for $81 million.
Fernandes Wants All Operations under One AirAsia
In a recent interview to Forbes, AirAsia Group CEO Tony Fernandes revealed the intention to put all AirAsia operations under one single entity.
I’m trying to unify AirAsia into one airline — a unique corporate structure within ASEAN. What we would like to do is create one holding company that would own 100 percent of all our airline companies operating in ASEAN countries. This would allow us to invest more, reduce costs and enable us to be much more efficient.
He said this could happen in the next two years:
The first step is to create the group company, and AirAsia Group Deputy Chief Executive Officer Rozman Omar is working hard on it. It’s a lot of work to do ‘One AirAsia’ as a corporate structure. But ‘One AirAsia’ as a company within a company is working really well.
AirAsia has operations in eight different countries: Malaysia, India, Indonesia, China, Japan, Philippines, Thailand and Cambodia.