King Power, the sole duty-free operator in Thailand, yesterday announced it had purchased a 39 per cent stake in AAV, valued at 7.945 billion baht from Tassapon Bijleveld and his family.
AAV is the operator of low-cost budget carrier Thai AirAsia (TAA), with Tassapon as its chief executive officer.
“TAA and King Power will greatly complement each other, providing cutting edge services and products above anything offered by other players in the sector.
“This will accelerate the growth of TAA and ensure it remains at the forefront of the low-cost carrier business,” Vichai told reporters here today.
Vichai, his son Aiyawatt and Tassapon met the media at King Power’s headquarters at Rangnam, Bangkok.
The duty-free tycoon also believed that with his business background and King Power’s experience in the tourism industry, the partnership would provide an invaluable contribution to the airline business.
King Power also owns English Premier League champions Leicester City Football Club.
The company will purchase the remaining 60 per cent stake in AAV, listed on the Stock Exchange of Thailand (SET), at 4.20 baht per-share and has appointed Siam Commercial Bank as the financial adviser for the tender offer.
Meanwhile, Tassapon, who will remain as TAA chief executive officer, said his decision to sell his and his family’s interest in AAV, came about as a result of laws and regulations that govern airline businesses in Thailand, where at least 51 per cent of shares in the air operator must be held by a Thai.
“Given the restrictive nature of such rules, there are only a handful of Thai individuals who realistically would be interested in and can afford the purchase price,” he added.
He previously held 44 per cent of AAV and will continue to hold a five per cent stake in AAV after the tender offer.
TAA, he said, would continue to grow and invest as planned for 2016, accepting delivery of 51 new aircraft which together with its existing fleet, would fly an estimated 17 million passengers to various destinations within the region
“We became successful in the last five years with the highest market share and continued expansion and coverage in Asia. We need to maintain growth momentum of 20 per cent annually,” Tassapon added.
He said King Power was viewed as a partner who could help the airline grow further.
He also said AirAsia founder, Tony Fernandes, was aware of the acquisition of AAV shares by Vichai and excited by the prospects and business opportunities from the partnership.
In a joint-statement issued by King Power and TAA, Fernandes said this investment proved that TAA’s value proposition remained undiminished.
“The vote of confidence that comes from one of the most successful family businesses is fantastic. The potential tie-up between AirAsia and King Power is massive and we look forward to working together, not only in Thailand but across the group and Asean,” he added.
Meanwhile, in another statement, the SET wanted AAV to clarify yesterday’s stake sale, which was refuted by the company in a previous statement to the bourse.
– BERNAMA