AirAsia X Bhd said it swung into a net loss in its third quarter from a year earlier, blaming higher costs and lower unit revenues particularly in its main markets of Malaysia and Thailand. (Reuters Photo/Charles Platiau)

Small Cap Logistics Firm Used for Indonesia AirAsia Backdoor Listing in Jakarta


AUGUST 30, 2017

Jakarta. Rimau Multi Putra Pratama, a Jakarta-listed logistics and warehouse company with a small market value, plans a rights issue in the fourth quarter to raise up to Rp 3.41 trillion ($255.41 million), it said in a filing to the Indonesia Stock Exchange on Tuesday (29/08).

Rimau, traded under the ticker CMPP, plans to use the bulk of the rights issue proceeds to acquire Indonesia AirAsia, a local affiliate of Asia's largest low-cost carrier AirAsia, raising a speculation that it may be an effort for a backdoor listing from the budget airline.

"Despite the fact that Indonesia AirAsia has canceled the plan to go public, its effort to conduct a backdoor listing is still counted as its way to enter the capital market," said Nafan Aji, an analyst at brokerage firm Binaartha Sekuritas.

Nafan said AirAsia's decision to conduct a backdoor listing is a wise move to reap fresh capital in an effort to improve the company's financial performance. He said investors deem the airline industry in Indonesia as attractive, with a large market potential.

Rimau seeks to offer 13.64 billion of new shares to undisclosed investors at Rp 250 per share, which would translate into Rp 3.41 trillion in fresh funds. It said at least 76 percent of the proceeds, equivalent to Rp 2.6 trillion, will be allocated to acquire 241,067 shares of Indonesia AirAsia — 57.25 percent of the airline's total equity.

Each share is priced at Rp 10.78 million.

CMPP will also use the remaining proceeds, around 24 percent, to beef up its working capital and its own subsidiaries.

A general shareholders meeting for approval will be held on Oct. 6.

The transaction is expected to be wrapped up in the fourth quarter.

The majority stake of Indonesia AirAsia is currently controlled by local company Fersindo Nusaperkasa, an Indonesian-based investment vehicle funded entirely by Malaysia's AirAsia, while 49 percent is held by Malaysia's AirAsia Investment, also an affiliate of AirAsia.

Meanwhile, CMPP is in 76.24 percent controlled by Rimau Multi Investama and the public owns the rest.

CMPP said in Tuesday's filing that existing shareholders, who own 337 shares of CMPP are entitled to purchase 23,818 new shares in the company. Fersindo Nusaperkasa and AirAsia Investment will be the standby buyers for the rights issue.

Once the rights issue is completed, Rimau Multi Investama's controls in CMPP will be diluted to just 1.19 percent and public shareholders will only hold 0.48 percent if they choose not to exercise their rights in the offering.

As a result of the upcoming rights issue, the majority of the stake in CMPP will be controlled by Fersindo Nusaperkasa (49.96 percent) and Indonesia AirAsia (48 percent).

"The transaction will provide Indonesia AirAsia direct access to capital markets for future fund raising and provide AirAsia Group with the financial flexibility to pursue growth opportunities in the region and beyond," AirAsia said in a filing to the Malaysia Stock Exchange on Tuesday.

The company, which operates 22 aircraft, also expects to double its size by 2020, and to strengthen its brands, commercial business and operations.

Previously, Indonesia AirAsia announced an intention to conduct an initial public offering in the fourth quarter, and selling up to 30 percent shares from its equity.