AirAsia-owner Capital A will seek to raise US$200 million from Hong Kong listing
It would be one of the biggest South-east Asian firms to dual list in Hong Kong
[KUALA LUMPUR] Capital A wants to raise at least US$200 million from a secondary listing in Hong Kong as the parent of AirAsia looks to tap mainland Chinese investors and accelerate growth.
The company is undervalued due to the Malaysian stock exchange’s classification of it as financially distressed – a status it is held since 2022, chief executive officer Tony Fernandes said in an interview on Tuesday (May 6). The potential for South-east Asia, where much of Capital A’s exposure lies, to weather global geopolitical tensions may prove attractive to investors, he said.
“With geopolitics, Asean has got more awareness in North Asia,” Fernandes said, referring to the 10-nation bloc whose members includes Indonesia, Malaysia and Singapore. “We thought it was a great way to raise capital.”
The push for a secondary listing follows a meeting with Hong Kong Exchanges & Clearing (HKEX) chief executive officer Bonnie Chan during her visit to Kuala Lumpur in February, he said. Capital A is mulling proposals from investment banks that Fernandes declined to identify, but has not yet issued mandates. Fernandes said he expects to raise more than US$200 million from a Hong Kong listing, though the company is waiting a full valuation assessment by banks.
HKEX is benefiting from a pick up in trading and listings since late last year, and dealmakers are optimistic about a boom in secondary listings from mainland-traded Chinese firms this year. The bourse is already processing a pipeline of more than 150 companies’ applications to list. Should the exchange land Capital A, it would be one of the biggest South-east Asian firms to dual list in Hong Kong, which vies with rival financial hub Singapore for business.
Capital A’s airline group AirAsia is also drawing interest, with Bloomberg News reporting that Saudi Arabia’s sovereign wealth fund is poised to invest about US$100 million in the low-cost Malaysian carrier.
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Fernandes said AirAsia, which does not hedge fuel, has benefited from oil’s roughly 20 per cent decline in the past month and broad strengthening of emerging market currencies against the US dollar. BLOOMBERG
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