“Now Everyone Can Buy AirAsia X shares 10 times above its par value of RM0.15”

The happy "family". Left to right: Datuk Nasir Razak, the CEO of CIMB, Datuk Kamarudin Meranun of AA X, Tan Sri Rafidah chairman of AAX, En Azran Rani of AAX and Tan Sri Tony Fernandez of AAX

The “happy family” laughing all the way to the … . From left: Datuk Seri Nazir Razak, the CEO of CIMB Bank, Datuk Kamarudin Meranun of AA X, Tan Sri Rafidah chairman of AAX, En Azran Osman-Rani of AAX and Tan Sri Tony Fernandes of AAX

At long last AirAsia X Bhd will finally be listed in Bursa Kuala Lumpur very soon. On 10-6-2013 AirAsia X Bhd has made an official announcement of its Initial Public Offering (IPO) of up to 790,123,500 ordinary shares of RM0.15 in the main Board of Bursa Kuala Lumpur (BSKL).  The retail price of the IPO is RM1.45, which is almost 10 times above its par value. Based on its retail price it would appear that AirAsia X Bhd is a rock solid company with big “dreams” otherwise its IPO price would not have been fixed at RM1.45!

AirAsia X Bhd was meant to be listed in November 2012 but it didn’t take off. May be it was due to “bad weather” then.  At that material time, MITI also made available Bumiputera Special Share/Saham Khas Bumiputera for Bumiputera. But on this ocassion there is nothing pbublished in the MITI website as yet but AirAsia Bhd has allotted 260,740,700 shares to Bumiputera institutional and selected investors approved by MITI.

AirAsia X Bhd is hoping to raise RM1.15 billion through this IPO price of RM1.45 per share.

The principal adviser is none other than CIMB Investment Bank Bhd. Joint Managing Underwriters and Joint Underwriters are CIMB Investment Bank Bhd and Maybank Investment Bhd.  The above were  information available in the public domain.

The famous FAX logo before it turned into AirAsia X Sdn Bhd, soon it will be AirAsia X Bhd.

The famous FAX logo before it turned into AirAsia X Sdn Bhd, soon it will be AirAsia X Bhd.

Lets start with the background of AirAsia X Sdn Bhd.  It was incorporated under the name of Fly Asian Express Sdn Bhd (popularly known as FAX) on 19-05-2006.  Within a few months of its incorporation, FAX was granted the Air Operation Certificate (AOC).

Soon after incorporation FAX  lobbied very hard to take over the Rural Air Service (RAS) in Sabah and Sarawak. Of course, in 2006 the administration of Tun Abdullah took away the RAS from MAS and handed over to FAX with an immediate payment of RM249.9 million as subsidise. Please read in HERE

When MAS was operating the RAS it only received RM120 million subsidies, which was half of what FAX received from the Government, with little complaints.

After less than a year, there were too many complaints of poor service from the Sabah and Sarawak State Governments and the people, FAX had to give up RAS to MAS.  But FAX did not refund the subsidise on a pro-rata basis. Not a bad deal after all.

The poor RAS provided by FAX was due to lack of engineering expertise,  aviation experience and supervision by our Department of Civil Aviation (DCA). It was later discovered that out of the 14 aircraft used for RAS by FAX were grounded at the material time and one of which was cannabalised for spare parts.  When MAS took over the RAS from FAX, MAS had to pay RM35 million to refurbish all the aircraft operated by FAX  in order to make them airworthy again.  Please read in HERE.

In July 2007 FAX gave up RAS. On 21-9-2007, it changed its name to AirAsia X Sdn Bhd. Despite the poor RAS records, which has been shown to be unfit to operate an airline, DCA allowed it operate long haul flight when it could not even sustain a domestic operation with Fokker aircraft .  Thereafter, came the AirAsia X Sdn Bhd, sounded like a new airline altogether. Please read in HEREHEREHERE & HERE.

AirAsia X thrived on publicity stance and many announcements were made by Tan Sri Tony Ferndandez about its expansion plans.  A good example was the launching of  AirAsia Japan on 21-7-2011 where All Nippon Airline (ANA) owned 67% and AirAsia 33%).  AirAsia made news on its expansion. Please read in HERE.

But the ANA and AirAsia partnership was short lived. The AirAsia Japan only has a few aircraft to operate.  AirAsia Japan was operating 5 domestic routes and 3 international.  Even with such a small scale set up, AirAsia was seen to have capitalised on its expansion to Japan. Of course, the Star would publish any announcement made by Tan Sri Tony Fernandes, who is one of its directors, or anything done by AirAsia however trivial. Even a sale promotion announced by AirAsia will be treated as a worthy news!

on 11-7-2011 the Star saw it fit to hail AirAsia’s expansion to Japan as a milestone for AirAsia. Tan Sri Tony Fernandes has been quoted to have said “AirAsia Japan will not only boost economic growth between Asean and East Asia by providing better access to markets around the region but also enhance links within travel, trade and tourism.”  Where is the growth?

It would appear from records that to certain people “spinning is talking”.  Please read in HERE & HERE.  

Please also read “Tony Spin, Tony takes it up ,  “The GOOD do always eventually win” said Datuk Seri Tony Fernandes , “Another poor attempt at spinning” and ” Ular lidi, ular sawa, sekarang jadi anakkonda”

How could such a small scale operations with 5 domestic routes and 3 international boost economic growth between Asean and East Asia when the competition is so stiff in Japan and its authorities are very strict on air safety regulations and labour law .

How could AirAsia Japan survive the stiff competition with no help from Japanese government.  Japan is a totally different turf. Publicity stance will not help to push up the image of an airline.  AirAsia must also take note that the turf in Malaysia has also changed because there is no Badawi Administration to assist.  Hence, on 11-6-2013 ANA has announced that it is ending its  “marriage” with AirAsia. Another failed expansion of AirAsia. Please read in HERE.

Airasia X Bhd and Tan Sri Tony Fernandes should tell the investing public whether it has handed over million of RM of airport tax for no-show passenger before they started with the road show to garner the support of the investing public. Please read in HERE, HERE & HERE.

Please also read the “AirAsia acquisition of Batavia Air in Indonesia” which eventually did not take off the ground. Must be due to “bad weather” again!

AirAsia Bhd has been known to have owed airport tax to the tune of more than RM132 million in Malaysia. It tried to do the same in Indonesia and 3 of  its flights were grounded, in HERE.

Asia X Bhd has also announced that it has to take delivery of some 7 more Airbus at the end of the year under the so-called EXPANSION plans. AirAsia Bhd seemed to have faced the same problem in 2009. Please read “AirAsia needs fund to reduce debts”  in  September 2009″

Yours truly is no accountant or stock analyst. Therefore, yours truly had to rely on what have been published in the public domains. According to certain well established printed media the IPO of AirAsia X is definitely a good buy but some analysts are not that keen.

Gone with the days of guaranteed profits on the opening price of IPO share prices. Therefore, yours truly hopes that the investing public must not be too gullible and taken in by greed for all IPO shares. Please read and consider all available facts before parting with your money.

Yours truly has stumbled over a few  interesting articles which your truly feels that it is a must read.

On 2-11-2012 the blog of Serious Investing entitled “I think I’ll say X to Asia X IPO” but the article was written some 6 months ago. Since then AirAsia X must have performed superbly well for the past 6 months from November 2012 to June 2013 thus the IPO price of RM1.45 per share!

On 4-4-2013 Malay Mail published an article entitled “Analysts wary about AirAsia IPO where it highlighted Alliance Bank Analyst quoted the collapsed of the low cost airline known as Oasis in Hong Kong as an example to support his argument.

On 22-5-2013 Ganesh Sahathevan wrote in his blog entitled Would you buy what Richard Branson gave away: The Air Asia X IPO seems grossly over-priced”.

Just a reminder, during the height of the MAS-AirAsia share swap in August 2011, Tan Sri Azman Mokhtar, the MD of Khazanah, has once commented to several bloggers that the option for Khazanah to buy 10% of the shares of AA X under the infamous “MAS-AirAsia share swap” was a “DODGY DEAL. Please read in HERE.

It has also been stated in the blog: “Smart & Intelligent” entitled “AirAsia IPO, is it a repeat of ASTRO?”. It ended with this remark: “Just as a heads up, last week Air Asia have stated that they will not exercise their option to buy AiAsiaX in the Bursa Announcement. If they believe the price can goes up why didn’t they exercise that option now? Just as a remark for you to think before invest”.  Please read in HERE.

“Everyone Can Now Buy AirAsia X shares at 10 times its par value of RM0.15”.

Please use your own judgment before investing in the IPO of public listed companies in general.

36 thoughts on ““Now Everyone Can Buy AirAsia X shares 10 times above its par value of RM0.15”

  1. Pingback: Malay must know to be great by himself | INNERBLOG

  2. Now Everyone Can Be Cheated Too! HOW COULD AIRASIA X SHARE BE WORTH RM1.45 AFTER A SPAN A FEW YEARS WHEN IT WAS MAKING LOSSES OF RM80 MILLION THEN. I WOULDN’T WASTE A SINGLE SEN TO TOUCH THAT BULL SHIT SHARE.

    PUBLIC MUST STAY CLEAR FROM THIS IPO UNLESS YOU WANT TROUBLE. LET NAZIR OF CIMB TO FACE THE MUSIC.

  3. Mr Wee and hopefully your Datukship is on the way! I got some pink forms but even my banker refused to give me a loan to buy those below par shares. Too old to invest @ 70 and that was exactly the banker’s answer! I am not Ali Baba so the deal is off!

  4. investing public please read the dividend policy stated in the air asia x prospectus before investing in air asia x. To summarised they probably do not consider paying dividend to the shareholder as important, come what may, as had been a practice in air asia . Investor can only hope to get appreciation of share value (i.e if it ever occurs). Think before you buy air asia x share.. As for me, thank but no thanks even if Tony offer me RM0.15. You cannot be a fool all the time, and as a matter of principle, the way air asia x is being created and now being marketed to investing public as a creame de le creame shares by their advisors, bankers, shareholders and all interested parties,is just not right. Please! EPF, TABUNG HAJI and PNB , dont use my monies to support such a share..

    • Dino

      I can’t agree more with you. We must make sure that EPF, Tabung Haji and the other GLC also stay clear from AirAsia and AirAsia X.

  5. That bloody pariah spins all the time and the Star has been giving the helping hands. Trust me the musical chair will definitely stop sooner than expected. CIMB Nazir will be crying then.

  6. Should their AOC is having problem (not unusual for them), the share price will nosedive and so is your investment. Stay away!!

  7. Nazir razak was involved in the MAS & AirAsia share SUAP. Now he is involved in the IPO of this FAX or Fly Asian Express Sdn Bhd. This so-called liberal Melayu never learn. YB please do something about this fella Nazir. During the days of Slumberjack, it was the SIL. Now it is this Nazir. Something got to be done about this otherwise Najib will be dragged down by his brother Nazir.

    • Ask Tony or Azran and he will tell you it will go up to RM500 profit. It is just a hype. Don’t waste our time on this type of IPO. It is just an rescue plan. The company is in financial trouble. Expansion is just another hype. Like AA expansion to Japan. Now ANA showed AA the door. More to come.

      Just look at AA’s track record. It never pay any dividend from day one. What a good company.

  8. Branson of Virgin have washed his hands of Airasia selling his stake in Airasia X valueing A X at only 660 million..haha..

    So anyone buying tony IPO valued at 2.2 billion is a fool.

    Japan ANA also washing off Tony Fernandes. No profit. Get that. The Japanese cannot make a profit with AirAsia business model.

    This is what have been pointed out. It is a ponz.. scheme. AirAsia survive on loans after loans after IPOs.

  9. I wouldn’t touch the share of AirAsia X or AirAsia. The companies are loaded with debts. AirAsia X has no good track record. So please forget about investing in the IPO. Pls list it in Myamar. They must just believe the Red Indian.

  10. Ello,

    As I recalled, for a long time, Tony and gang have been planning for AAX IPO exercise. Initially, he was eyeing to float AAX shares overseas. Ding dong, ding dong a few years later…the IPO plan takes off but in Malaysia. I guess the shares tak laku to be listed elsewhere.

  11. The only benefit you will get is one free ticket. After that your investment will be gone.
    NOW EVERYONE CAN GET ONE FREE TICKET AND LOOSE AN INVESTMENT.

  12. AAsia, stay regional LCC full stop….AAX…wasting time..money..

    Remember, LCCT, LCCT BKI…..KLIA2….public money….in the billions, has KUL or BKI become stronger hubs to justify the RMs spent….

    AAX should be closed and routes given back to MH…..

    Objective must be to strengthen the 2 hubs for the benefit of Malaysia on both sides of the South China Sea. The multiplier effect on the rest of the economy when it is easier & seemless to travel to, from & through Malaysia unimaginable. Simply put, we’re in the middle of an archipelago with a huge potential.

    Throw this prospectus into the bin …… prospects dim for the rest of us Malaysians…..bar few quite ruthless opportunists.

    • Jack
      Bang on the money with yr great analysis
      Our geographical advantage ia being wasted for the greed of a few

  13. This fella Nazir is screwing Najib big time. First he was involved with the MAS AA share Suap. Giot the MAS and nation angry with NAJIB. Now he was involved with the IPO of AA X. He has a P brain I think. He should be shot and thrown into the longing. Who is going to buy AA X IPO share at RM1.45. Ten times its par value. Only idiot will do it. As has been said even AA did not want to exercise its right to buy. So Malaysians please don’t get carried away by this Nazir and that pariah.

  14. Please leave the AAX IPO for Kalimullah, Tony, Kamarudin, Nazir Razak and Azran to buy. I am sure that they have all the money to buy. We the rakyat just wait and see how it collapse right before our eyes.

  15. 15 Sen selling for RM1.45. What so great about AAX. Why pay a premium to buy a debt ridden company like AAX. Don’t be fool by Tony and Nazir. There are many other good shares in the market for us to buy. EPF and Tabung Haji stop being suckers.

    Why into a listed company which tells you before hand that you will not be paid dividend. better our money in the bank.

  16. i MAY BE OUT OF DATE, BUT ISN’T THERE A STIPULATION BY THE BURSA THAT A COMPANY MUST HAVE A 5-YEAR PROFIT RUN RECORD BEFORE THEY CAN GO FOR LISTING??

  17. AAX IPO? No way. AA no way. Just look at AA track record. It never gave out dividend. Don’t waste your time. Thank you YB for the article. How I wish you are still in Parliament to whack this red Indian and his outfits. This Datuk Nazir Razak must be stupid to get involve or he is equally desperate because of the huge loan given.

    • You are wrong. I’ve received dividends from AA 3x already and one of them was a special bonus dividend which was @16sen!!

  18. kita boikot AA dan AA X aja. Jaganlah kita semua diperbodohkan oleh Tony dan Nazir Razak. Nasib baik YB highlight harga IPO 10 kali ganda harga asalnya iaitu 15 Sen. Boikot, Boikot, Boikot AirAsia dan AirAsia X.

  19. Even the business section of the mouth piece of Tony, The Star, article by B S Sidhu was trying to paint a good picture of AirAsia and its expansion to India. ANA already issued a statement of the breaking up of ANA and AirAsia but the Star was trying to give the impression that AA was sill looking into the partnership. Sidhu has been writing rubbish especially on the subject involving AirAsia. She thought that we are all stupid except her and her boss Tony. Sudahlah bodoh atau telah mabok dengan iklan2 AirAsia.

  20. To make the happy family to be happier, I would think that AAX IPO will be over subscribed by 100 times. ka! Ka! ka! Both Tony and Nazir thought that we are all stupid to jump on the band wagon. No deal. God bless CIMB with all the big loans to AA & AAX.

  21. Nazir is an idiot that should be shot or kick into the longkang. How could a company like AirAsia X, which is a failed company, to have its IPO price fixed at RM1.45. Par value is 15 Sen. it was still in the red a few years ago. Starting to make profit these one or two years. He is just a wheeler dealer. A useless CEO. tak malu kah?

  22. Pingback: AirAsia should be RCIed | The "thirteen million plus Ringgit" guy rambles....

  23. I don’t think we should penalise AAX for being affiliated with the AA Group or whatnot. Isn’t the most important thing also looking at the fundamentals of the company? From what I can see, it is a company with good growth strategies. I think RM1.45 per share is a fair price

    • What fundamental AA X has? Except the important routes were hijack from MAS and the publicity stances by TF. Thanks to AJ of MAS for giving the Sydney route that belong to MAS to AA X. AA X is burden with debt like AA. We await to read the so-called fundamental of AA X.

    • If you think that there are fundamental in AirAsia X please go ahead and buy as many shares as possible. Blame no one when it goes down in the near future. It is a free world. It is your money. Please do as you please.

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