Thai AirAsia denies IPO rumours

No shareholding changes planned

BOONSONG KOSITCHOTETHANA

The budget carrier Thai AirAsia says it has no plans to further restructure its shareholding in response to fresh claims that it exceeds foreign ownership limits. Chief executive Tassapon Bijleveld denied local media reports that quoted AirAsia group chief executive Tony Fernandes suggesting Thai AirAsia would reduce the stake of Asia Aviation Co, which holds 50% of Thai AirAsia.

The reports said a plan was afoot to sell 30% of Asia Aviation's holding in an initial public offering to list Thai AirAsia on the Stock Exchange of Thailand (SET). The reports went on to say that part of the Asia Aviation shares would be given to Thai AirAsia employees as incentives.

Asia Aviation is 50% owned by Thai businessman Sittichai Veerathummnoon and 49% by Shin Corp, the telecom giant owned previously by ousted prime minister Thaksin Shinawatra's family. Mr Tassapon owns the remaining 1%.

Claims have been made that Mr Sittichai is a proxy of Temasek Holdings, the Singapore company that now controls Shin. Authorities have been scrutinising foreign interests holding stakes of more than 50% through nominees in several Thai firms, as well as airlines, which is against the amended Foreign Business Act.

Asia Aviation was reportedly among 12 companies under investigation by the Commerce Ministry for allegedly acting as nominees for foreign investors.

To be entitled to use an aircraft registration certificate to operate commercial scheduled flights from the Department of Civil Aviation, a carrier must be at least 51% owned by a Thai entity.

Asia Aviation Co was a company registered in Bangkok and technically considered as a ''Thai'' entity.

Asia Aviation was formed after Temasek Holdings of Singapore took over Shin Corp early last year to get around the airline ownership legal limit. Shin previously owned 50% in Thai AirAsia.

Thai AirAsia continues to be 49% owned by AirAsia Bhd, which is based in Malaysia.

Mr Tassapon told the Bangkok Post that he had spoken with Mr Fernandes, who denied suggesting the plan to make the Asia Aviation shares available in an IPO to Thai AirAsia employees.

He stressed that there was no immediate plan to restructure Thai AirAsia's shareholding, while insisting that Asia Aviation was not a nominee of Temasek. Last September, the Council of State cleared Thai AirAsia of allegations that its majority shareholders were nominees of foreigners.

''What we have been saying is that, ideally, we want to give some shares to employees as an incentive to give a sense of belonging, and list on the SET. However, there is no definite plan to proceed with the two issues,'' said Mr Tassapon.

General News
Bangkok Post
Thursday January 25, 2007