Bangkok Air planning to list next year Private company may sell up to 40% of stock
Published: 14/06/2012 at 07:48 AM
Bangkok Airways' planned divestiture to end its 44-year-old fully private ownership is taking shape as the carrier gets set for a new chapter of business life.
The airline has commissioned Bualuang Securities to draw up plans for an initial public offering (IPO), setting sights on the first quarter next year.
It may also offer up to a 40% interest in the company to help raise more funds for growth, specifically a fleet expansion and construction of new hangars at its Suvarnabhumi airport hub, said president Puttipong Prasarttong-Osoth.
Having mooted the IPO scheme for several years, Bangkok Airways only in March firmed up plans to raise 10 billion baht to consolidate its position as Thailand's leading regional airline.
"We want to grow our equity base [through the IPO], with new partners and investors becoming part of the airline, and also expand for the future in a way that the existing family-owned structure does not accommodate," Capt Puttipong told the Bangkok Post.
Bangkok Airways is readying itself to comply with the Securities and Exchange Commission's listing rules and ensure a successful IPO launch, he said.
More than 80% of Bangkok Airways is owned by Dr Prasert, the doctor-turned-businessman who founded the airline and has a substantial interest in Bangkok Dusit Medical Services, Thailand's largest private hospital group. Dr Prasert is the father of Capt Puttipong.
Bangkok Airways would be the second airline to list on the Stock Exchange of Thailand in less than a year.
On May 31, Asia Aviation Plc (AAV), the holding firm of the discount carrier Thai AirAsia, made its trading debut on the SET.
AAV issued 1.21 billion shares at 3.70 baht each, raising 4.48 billion baht to expand its fleet and boost capital.
For Bangkok Airways, a key strategy after listing on the SET is to consolidate its network in Southeast Asia.
"We want to fully cover Southeast Asia," said Capt Puttipong. "We want to resume flights to Vietnam, serve Mandalay as a second destination in Myanmar, fly to the Lao capital of Vientiane, and there are countries like Indonesia and the Philippines where we have not flown before."
Basically, Bangkok Airways _ dubbed "Asia's boutique airline" _ wants to cover destinations that are 4-5 hours' flight time from Bangkok.
The carrier's more immediate expansion is geared towards adding flights on existing routes; for instance, a third daily Bangkok-Yangon flight to commence in October.
Another idea is to ramp up frequency to the resort island of Samui towards the end of the year, as additional aircraft capacity becomes available.
The airline is confident of remaining profitable this year.
In the first quarter, Bangkok Airways reported a net profit of 500 million baht and has conservatively projected full-year earnings of 800 million baht.
"We would rather be conservative in our projection, since we don't know how soon fuel prices will resume their rally and we normally have seasonally low load factors in the second and third quarters," said Capt Puttipong.
Bangkok Airways posted a 47% jump in net profit last year to 1.22 billion baht. It carried 3.09 million passengers, 16.5% more than in 2010, and this year expects a 16% rise to 3.6 million.
Bangkok Airways recently took delivery of its 19th aircraft, a A319 jet, with two more A320s set to join the fleet in October and December.
The carrier's current fleet consists of eight ATR 72 turboprops, three A320s and eight A319s.
http://www.bangkokpost.com/business/aviation/297966/bangkok-air-planning-to-list-next-year
