Tony Fernandes’s Capital A Group is planning New York listings for its low-cost AirAsia airline and a digital super app, the Financial Times reported on Sunday.
“If you want to be an actor, you’re probably going to want to end up in Hollywood at some stage in your career,” Fernandes told the Financial Times.
“We think the time is right for part of Capital A Group to be listed in the US,” he was quoted as saying.
He said the group had begun compliance work and envisaged two separate listings, one for AirAsia “sometime next year”, followed by the so-called super app, which will offer services from travel to takeaways.
The company, which previously considered merging its digital businesses with a special purpose acquisition company (SPAC), dipped into the red during the pandemic, prompting audit firm EY in July 2020 to question its ability to survive. Fernandes said that issue had now been resolved.
Capital A, previously known as AirAsia Group, has been aggressively building its digital businesses and super app over the last two years as most of its planes were grounded due to travel restrictions to contain the COVID-19 pandemic. The group has hoped to build its super app, modeling regional tech giants such as Grab’s and Gojek’s super apps which offer a variety of services including ride-hailing, food delivery, and payment services.
Capital A remains under Practice Note 17 (PN17) on the Malaysian stock exchange — a listing for groups in financial distress. Fernandes, who is Capital A’s Chief Executive Officer, insisted that was a solvable “accounting” issue, which “doesn’t reflect the fundamentals of the company”, he told Financial Times.
He said 85 of AirAsia’s 212 aircraft were now flying, with 80 to 90 percent load factors, and 176 aircraft back in the skies by December. “I think in the third and fourth quarter, we would be EBITDA-positive, including leasing, and so . . . I’m quite confident of 2023 being profitable and definitely cash flow positive,” he was quoted as saying.
Capital A’s first-quarter losses widened to MYR903.79 million ($204.67 million) from MYR767.42 million a year ago.
Revenue jumped 152.78 percent year-on-year to MYR811.78 million.
Commenting on the listing plans, Fernandes cited his success in transforming from Warner Music executive to budget aviation pioneer after buying AirAsia from the Malaysian government in 2001 for less than $1, would eventually sway investors.
“Twenty years ago, when I started this airline, no investor wanted to invest in us. It wasn’t a very convincing story to say you’re going to start up an airline when you’re from the music business, with no money, and go up against Malaysia Airlines, Singapore Airlines and the like,” he was quoted as saying.
“Twenty years later, I now say I’m going to take on these digital unicorns. Probably not a convincing story either from an airline that’s struggling, going through Covid, has a weak balance sheet, etc. But it’s slowly coming,” he told Financial Times.
The airasia super app was valued at around $1 billion in July last year in a deal where the digital arm of AirAsia Group will acquire Gojek’s operations in Thailand for $50 million. The purchase considerations for the proposed acquisitions will be wholly satisfied by the issue of new shares in the airasia super app. Gojek will own 4.76 percent in airasia super app after the acquisition, the companies announced then.
On Monday, Capital A shares were trading at MYR0.635 at the time of writing, giving the group a market capitalization of MYR2.642 billion ($598.26 million) .
AirAsia aims to become Asia’s largest food delivery, ride hailing company – report