By BLOOMBERG
Benyamin Ismail
AirAsia X Bhd said taking the company private is an option, after shares of the long-haul budget carrier in Tony Fernandes’ AirAsia group plunged 65% in the past year to become the worst-performing airline in Asia.
Sister company AirAsia Bhd also is looking at the same option, AirAsia X chief executive officer Benyamin Ismail said in an interview in New Delhi on Wednesday.
“That’s something that I’ll let shareholders comment, both of us, as an option, both companies are looking at, AirAsia Bhd, us,” said Benyamin, who was in India to announce the resumption of AirAsia X flights to New Delhi. “As a shareholder, the valuation of the company is very cheap at the moment, it’s very good to take it private.”
However, he added, there currently are no plans to take the companies private and it could be a challenge to find investors willing to do so. AirAsia didn’t immediately reply to an email seeking comment.
AirAsia X and AirAsia Bhd became Asia’s worst-performing airline stocks in the past year after a fatal crash by an Indonesian affiliate, mounting competition and a weaker ringgit currency damped investor demand. The decline was exacerbated by a GMT Research report last June questioning AirAsia’s accounting.
Limited hedging
Shares of AirAsia X rose as much as 14% on Wednesday, their largest gain on record, and closed up 11% at 20 sen in Kuala Lumpur. AirAsia shares rose 0.7% to RM1.39.
AirAsia X has hedged half of its 2016 oil requirements at about US$60 a barrel and could hedge further if oil prices fall to about US$20 to US$25, as the lifting of sanctions on Iranian exports could aggravate oversupply, Benyamin said.
The carrier has held off from hedging more at the US$60 level because it expects prices to fall further, he said. Crude oil futures in the US fell below US$30 for the first time in more than 12 years on Tuesday.
“For oil, the best way to think about it is to enjoy first,” Benyamin said.
— By Anurag Kotoky
You must be logged in to post a comment.