Thai AirAsia eyes $150m from 2011 IPO

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Thai AirAsia plans to raise at least $150 million from an initial public offering in Bangkok before the end of the year.

"Following the strong performance in 2010, we are confident that this is the right time to access the capital markets for further expansion." says Tassapon Bijleveld, CEO of the low cost carrier that is 49% owned by Malaysia's AirAsia.

Around 25% of its shares will be listed on the Stock Exchange of Thailand, says the airline. Apart from AirAsia, Thai firm Asia Aviation owns 50% of the carrier while Tassapon owns 1%. It did not say how their stakes will be diluted.

Credit Suisse Securities (Thailand), CIMB Securities (Thailand) and Thanachart Securities have been appointed as underwriters, it adds.

"The proceeds of this IPO will be used to further strengthen the company's capital structure to a level appropriate to support our future operations, including the acquisition of additional aircraft," adds Tassapon.

The airline has a fleet of 20 Airbus A320s, but that will grow to at least 40 "in the medium term", it says. The IPO, it adds, will "accelerate our growth".

"We will be able to reap the benefits of our investment in our Indian sectors which we started flying in 2010, where we have seen a strong demand and great potential for growth. Also the Thai economy is expected to remain buoyant throughout 2011. There is further room for the market to expand as there is strong demand for travel in the Asia-Pacific region," says Tassapon

Tassapon says that the airline aims to strengthen both domestic and international travel from its three hubs - Bangkok, Phuket and Chiang Mai. This year, the carrier plans to add one more route to India and add more frequency to its Bangkok-Singapore flights.

Thai AirAsia's revenues grew 33% to 12.4 billion baht ($407 million) in 2010, and it posted a profit after tax of 2.85 billion baht. The airline carried 5.8 million passengers in 2010, and that is expected to go up to 7 million this year. It had a load factor of 78% last year, says Thai AirAsia.