King Power said today it has bought a $225 million stake in Thai Air Asia, the largest budget airline in Thailand.
The purchase gives King Power’s owner, Vichai Srivaddhanaprabha, the means to tap into Thailand’s tourism industry and expand beyond his hotel and duty-free businesses.
“We are in the same business, the tourism business, which is a key factor in growing the Thai economy”, Vichai said, adding he expects Thai Air Asia to continue growing by 20-25 percent a year.
Thai Air Asia is fifty five percent owned by Asia Aviation, a Thai company, with the rest owned by Air Asia group founded by Malaysian Tony Fernandes.
King Power purchased thirty nine percent of Asia Aviation from the CEO Tassapon Bijleveld for 7.945 billion Baht, making it the second largest shareholder in Thai Air Asia.
Bijleveld will keep five percent of the shares and stay on as CEO, King Power said, with the rest of Asia Aviation’s stock owned publicly.
King Power said it was able to snap up the shares at a price “substantially lower” than the market rate because local airlines must legally be more than fifty percent owned by Thais.
“Given the restrictive nature of such rules, there are only a handful of Thai individuals who, realistically, would be interested in and could afford the purchase”, the statement said.
Last year Thai Air Asia carried 14.8 million passengers and plans to serve 16.9 million travellers in 2016. It made $30 million net profit last year, a company record.
SOURCE: Yahoo News.