AirAsia Indonesia, the local units of Southeast Asia largest budget airline AirAsia, is weighing on a backdoor listing as an alternative to an initial public offering at Indonesia Stock Exchange to raise capital from the stock market next year. (GA Photo/Mohammad Defrizal)

AirAsia Indonesia Weighs on Backdoor Listing at IDX

BY :RAUSYAN FIKRY

DECEMBER 13, 2016

Jakarta. AirAsia Indonesia, the local units of Southeast Asia largest budget airline AirAsia, is weighing a backdoor listing as an alternative to an initial public offering at Indonesia Stock Exchange to raise capital from the stock market next year.

"We are exploring all options available to us," Dendy Kurniawan, the president director at AirAsia Indonesia, over the weekend.

The airline saw government bar it from opening new routes last year after the company reported negative equity on its balance sheet.

While the parent company had come to the rescue by injecting new capital, AirAsia Indonesia has yet to return to profit, making the airline less attractive for an IPO, according to a source with knowledge of the company's plan.

Backdoor listing, or reverse takeover, allows a privately-held company to gain publicly-traded status by taking over a company listed in a stock exchange. In the process it may also inject new assets into the company.

After all, AirAsia is not the only airline planning to compete for fresh funds from the bourse next year.

Rival Sriwijaya Air have announced their plan for an IPO next year to fund their expansion.

"Sriwijaya is very profitable," said Iwanho, vice president director at RHB Securities, which assisted Sriwijaya in the IPO.

Lion Mentari Airlines, the company behind Indonesia's largest budget airline Lion Air, has also been vying for IPO since 2014. But, the airline founder Rusdi Kirana said earlier that it would not pursue it next year, stating that the company still have enough funds for its operation and expansion.

Today, flag carrier Garuda Indonesia is the only airline to have its shares traded at the IDX.

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