AirAsia X, the long haul arm of Asia’s budget carrier AirAsia Bhd, is offering up to 790.12 million shares in an initial public offering (IPO) to raise funds to expand its fleet and pay down debt, a draft prospectus showed today.

The IPO, expected to debut by January and to raise about US$250 million, is one of three listings worth US$500 million that AirAsia’s founders, Tony Fernandes and Kamarudin Meranun, will

kick off next year, helping to cement Malaysia as Asia’s top IPO destination.

AirAsia X said in the prospectus the offer represents up to 33.3 percent of its enlarged paid-up capital. Of this, 685.68 million shares, or 28.9 percent, will be offered to institutional investors. The balance of 104.44 million shares, or 4.4 percent, will be allocated to the retail tranche, AirAsia X said.

Reuters reported on Sept 21 that the company planned to list on the Kuala Lumpur stock market in December or January in an IPO expected to raise about US$250 million.

Based on the IPO size of US$250 million, the total 790.12 million shares could be worth US$0.316 per share or 97 Malaysian sen, according to Reuters calculations.

The company has given no information on pricing, the size of the listing or a timeframe for the IPO.

AirAsia X’s draft prospectus said it would use 21.5 percent of the IPO proceeds for capital expenditures ranging from buying spare parts to setting up new hubs. Another 55.1 percent would be used to repay bank borrowings, 20.2 percent for working capital and the balance for listing expenses.

The company said it hired CIMB as principal adviser for the IPO. CIMB, Credit Suisse and Maybank are the joint global coordinators.

Barclays, BNP Paribas, CIMB, Citi, Credit Suisse, HSBC, Maybank and Morgan Stanley are the joint bookrunners for the institutional offering, according to AirAsia X.

- Reuters