Manufacturing Industry
AirAsia IPO share price falls 17% short
Airline Industry Information, Oct 29, 2004
AIRLINE INDUSTRY INFORMATION-(C)1997-2004 M2 COMMUNICATIONS LTD
AirAsia's initial public offering (IPO) will reportedly raise less than expected due to the lack of interest in the high price set by the company for its shares.
Malaysia's leading low-cost airline set a price of MYR1.51 for institutional investors and MYR1.40 for retail investors but sources close to the deal were quoted as saying on Friday (29 October) that institutional investors will only pay MYR1.25 per share, a drop of 17%, and retail investors will pay MYR1.16 per share. The IPO is now expected to raise USD226m.
Fund managers said that they were not surprised by the figures as high oil prices and competition from Tiger Airways in the region led to concern from investors. Despite the IPO falling below AirAsia's own estimates the shares still value the company at 16.7 times over its forecast earnings for the year ending June 2005, reports Reuters.
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