Privatise AirAsia, take-over Malaysian Airlines; Another Avenue Assets-ECM Libra in the making?
The following has been recently reported:
Southeast Asia's largest discount airline, rose for the first time in three days on the Kuala Lumpur stock exchange after the Edge newspaper said the carrier's biggest shareholders are considering a buyout.
(http://www.bloomberg.com/apps/news?pid=20601213&sid=a88FsGpZNzk8&refer=home)
AIRASIA Bhd's major shareholders may have to pay some RM1.25 billion to take the budget carrier private, analysts say.
(http://www.btimes.com.my/Current_News/BTIMES/Monday/Frontpage/jasia05-2.xml/Article/index_html)
Readers are reminded that Fernandes and Co, AirAsia's major shareholders, are not what one might consider cash-rich. Hence the question to ask here is how such a deal might be made doable. One option, which this writer thinks is probable, might involve the following:
a) Tune Air ie Fernandes and Co borrow the required sum , say RM 1.25 billion as reported, and take AirAsia private, AirAsia stock serving as collateral for a bridging facility
b)The loans are then transferred to AirAsia, and/or charged against AirAsia's assets,instead of AirAsia stock
c)The entire company with its new borrowing is then injected into a listed company, freeing Tune Air of any debt obligation and instead providing it unencumbered , tradeable, liquid stock.
Readers get no prizes for guessing that the listed company is likely to be Malaysian Airlines Bhd. Subsequently, Tune Air gets a substantial if not the majority stake in MAS and probably the right to manage the merged AirAsia-MAS. After all, Tony and Co have proven that they have undoubted skills in airline management (see story below).
The above bears similarity to the Avenue Assets-ECM LIbra transaction (http://www.theedgedaily.com/cms/content.jsp?id=com.tms.cms.article.Article_2aa8cb03-cb73c03a-b113c700-cc9e648c).
Readers will recall that Tony & Co and Kalimullah Hassan and Lim Kian Onn of ECM Libra are now associated via AirAsia X and other ventures-see http://www.airasia.com/site/my/EN/pressRelease.jsp?id=17e1b7ba-ac1e00ae-39281400-a8ef3d01 & http://www.smidec.gov.my/pdf/3)AirAsia%20X.pdf
Southeast Asia's largest discount airline, rose for the first time in three days on the Kuala Lumpur stock exchange after the Edge newspaper said the carrier's biggest shareholders are considering a buyout.
(http://www.bloomberg.com/apps/news?pid=20601213&sid=a88FsGpZNzk8&refer=home)
AIRASIA Bhd's major shareholders may have to pay some RM1.25 billion to take the budget carrier private, analysts say.
(http://www.btimes.com.my/Current_News/BTIMES/Monday/Frontpage/jasia05-2.xml/Article/index_html)
Readers are reminded that Fernandes and Co, AirAsia's major shareholders, are not what one might consider cash-rich. Hence the question to ask here is how such a deal might be made doable. One option, which this writer thinks is probable, might involve the following:
a) Tune Air ie Fernandes and Co borrow the required sum , say RM 1.25 billion as reported, and take AirAsia private, AirAsia stock serving as collateral for a bridging facility
b)The loans are then transferred to AirAsia, and/or charged against AirAsia's assets,instead of AirAsia stock
c)The entire company with its new borrowing is then injected into a listed company, freeing Tune Air of any debt obligation and instead providing it unencumbered , tradeable, liquid stock.
Readers get no prizes for guessing that the listed company is likely to be Malaysian Airlines Bhd. Subsequently, Tune Air gets a substantial if not the majority stake in MAS and probably the right to manage the merged AirAsia-MAS. After all, Tony and Co have proven that they have undoubted skills in airline management (see story below).
The above bears similarity to the Avenue Assets-ECM LIbra transaction (http://www.theedgedaily.com/cms/content.jsp?id=com.tms.cms.article.Article_2aa8cb03-cb73c03a-b113c700-cc9e648c).
Readers will recall that Tony & Co and Kalimullah Hassan and Lim Kian Onn of ECM Libra are now associated via AirAsia X and other ventures-see http://www.airasia.com/site/my/EN/pressRelease.jsp?id=17e1b7ba-ac1e00ae-39281400-a8ef3d01 & http://www.smidec.gov.my/pdf/3)AirAsia%20X.pdf
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