AirAsia unit heads for Nasdaq itemizing after SPAC deal

AirAsia is ready to listing its model administration unit on the Nasdaq after finalizing a SPAC merger, because it bets on the attraction of franchise and licensing alternatives to a U.S. viewers that doesn’t but broadly know the funds airline.

Tony Fernandes, AirAsia founder and CEO of Malaysia-based Capital A Berhad — which owns the short-haul airline and associated items together with the model enterprise — instructed CNBC this week that he would search to boost consciousness of the potential in Southeast Asia’s practically 700-million-strong inhabitants and past.

“We picked America because Americans understand branding better than the markets in Southeast Asia,” Fernandes stated, acknowledging that the AirAsia model itself shouldn’t be well-known within the U.S.

“It’s my job to get investors excited about the growth potential of our brand … and also being in a very exciting part of the world, with geopolitics, Asean has received much more attention.”

Model licensing alternatives might embody motels, cell providers and airways in markets equivalent to south Asia and Africa the place AirAsia doesn’t have subsidiaries, Fernandes stated.

The deal values the brand new firm, Capital A Worldwide, at $1.15 billion, in line with a launch Wednesday. The enterprise may even have a look at acquisitions and licensing its 14 different manufacturers.

In 2001, Fernandes purchased the then-failing service AirAsia from the Malaysian authorities for one Malaysian Ringgit (roughly 20 cents) and 40 million Ringgit in debt. The low-cost airline has grown to a fleet of greater than 240 plane presently.

Fernandes is engaged in a broader battle to elevate Capital A Berhad out of the financially distressed standing it acquired from Malaysian regulator through the pandemic and supply capital injections to gas additional progress.

A serious a part of that’s its plan to sell off AirAsia’s core short-haul aviation business, comprising a number of regional subsidiaries, from Capital A Berhad to its Malaysia-listed sister agency Air Asia X — its mid- to long-haul enterprise. That can create a unified Air Asia Group, Fernandes stated, which is targeting a $400 million equity raise, in line with Reuters.

Topic to regulatory approval, the deal finalized Wednesday with Aetherium Acquisition Corp.— a particular function acquisition firm, or SPAC — will lead to Capital A Worldwide going public on the Nasdaq inventory trade. A SPAC is a publicly traded firm shaped solely to merge with or purchase one other firm, offering it with a swifter path to a inventory market itemizing.

SPACs noticed a boom in popularity in 2020 and into 2021, amid frenzied market exercise on the peak of the Covid-19 pandemic. That circulate slowed sharply in 2022 as quite a few firms failed to fulfill lofty expectations and as market volatility and rates of interest started to rise.

“Why a SPAC? I see it really as a reverse listing in America,” Fernandes stated. “SPACs have got a bad name because a lot of these were, I’m going to be frank, hair-brained business schemes, sending people to the moon… We’re generating real cash flow, real profits,” he added.

On a smaller scale, AirAsia’s path will mirror that of Singapore-based, Southeast Asia-focused Grab, a “super app” service which began trading on the Nasdaq in Dec. 2021 after closing a SPAC merger.

The Softbank-backed firm has confronted a turbulent journey, with shares tumbling on their first day of commerce and languishing since.

“Like it or lump it, Grab has set the way by showing that a Southeast Asian company can list in America,” Fernandes stated. “It’s not going to be a walk in the park, we’ll have to work [for] it, but while we might not be as well known in America, the concept of what we’re doing is better understood in that part of the world.”