Virgin Group’s Richard Branson is being tipped to acquire a 20 percent stake in Malaysia’s AirAsia long-haul budget carrier AirAsia X. (8/8/2007)
“This Friday will mark a major milestone for Malaysia’s first long haul low-cost carrier, AirAsia X, with the entry of a big foreign investor. This could forever change its fortunes and bring foreign direct investment into Malaysia. The name of Sir Richard Branson has been bandied about as being the big investor and as last minute arrangements are being worked out in London, Branson is expected to attend the Friday event. It is learnt that Branson, via the Virgin Group, would take up a 20 percent stake in the airline’s operator, Fly Asian Xpress Sdn Bhd (FAX),” reported thestar.com.my.
According to the same report, the selling of the 20 percent stake in FAX is the first round of funding required by the airline to kick-start operations and partly pay for the 15 aircraft that FAX has ordered. It is learnt that with the sale, FAX should be capitalised at US$30 million.
AirAsia Chief Executive Tony Fernandes declined comment on the report even as the company said it would be making a major announcement on Friday.
“I am not saying anything,” Fernandes said. In a separate statement, the company said long-haul operator “AirAsia X will be making a major announcement involving a strategic global investor. We promise you it will be a memorable one.”
“With Branson taking up a 20 percent equity interest in FAX and another 20 percent expected to be sold to sister company, AirAsia Bhd, the remaining 60 percent in FAX would be held by a group of investors comprising AirAsia CEO Datuk Tony Fernandes, deputy group CEO Datuk Kamarudin Meranun, Raja Azmi Raja Razali, Datuk Seri Kalimullah Hassan, Lim Kian Onn and some senior FAX employees, including its CEO Azran Osman-Rani,” reported thestar.com.my.
“A second funding exercise to raise US$50 million to US$60 million via a share sale and borrowings would be initiated by year-end, pending completion of the first round.”
