It was announced today that King Power CEO billionaire Vichai Srivaddhanaprabha has bought 39 percent stake of Thai AirAsia and added the popular budget airline into his empire.
Vichai’s King Power Group (KPG) bought the controlling stake of Asia Aviation (AAV), the parent company of Thai AirAsia, for THB7.9 million from Tassapon Bijleveld, the company’s CEO, and two members of his family.
Apparently, this sale was in the works for quite some time. AAV’s board of directors quietly approved the sale by Tassapon and his family last year. They told the Stock Exchange of Thailand (SET) yesterday that they had approved the sale of 1.8915 billion shares for THB4.20 to CEO and founder of King Power Duty Free, Vichai, and four of his family members.
AAV’s share price was up by 1.69 percent yesterday and closed at THB6. So, like most things Vichai touches, it’s doing well.
When all was said and done by the end of yesterday, Tassapon had reduced his stakeholding in AAV from 13 percent to just five percent. His two family members’ shares were reduced from 31 percent to zero. As of today, Vichai owns 14 percent of AAV and his four family members own 25.82 percent.
At the same time, the board of AAV approved the immediate placement of three new directors. KPG Vice-chairman Sombat Dechapanichkul, and Vichai’s sons, Aiyawatt Srivaddhanaprabha and Apichet Srivaddhanaprabha, will replace departing directors Pattra Boosarawongse, Tanapat Ngamplang and Prechaya Rasametanin, according to The Nation.
Tassapon will stay on as CEO of AAV for the next five years.
Tassapon’s family decided to sell the shares to Vichai’s family at a below-market price because the buyers had the cash on-hand and because the shares needed to be sold to a Thai buyer (Thai airline companies must be 51 percent owned by Thais) and because Vichai will work to develop the company further.
Due to stock-market regulations, if Vichai wants to acquire all of AAV, he’ll need to make a mandatory tender offer to acquire the remaining parts of AAV from other stakeholders in accordance with stock-market regulations.
According to the Bangkok Post, however, Vichai doesn’t want to acquire all of AAV, nor does he want to change the day-to-day running of Thai AirAsia.
Recent reports hinted that Vichai and his family were planning to pay THB3 billion for 23 percent of AAV. Rumor has it that Vichai hops that acquiring part of the large aviation group will increase duty-free sales for passengers both on board, in airports and at the King Power stores on Soi Rangnam in Bangkok, Pattaya, Phuket and Hat Yai.
Other rumors mention that KPG’s duty-free contract with Thailand’s airports expires in five years and this is a way to ensure future sales because, if the airports don’t renew with KPG, they can still sell on board AAV flights.
In addition to King Power — and now part of AAV — Vichai (who is worth THB109 billion) owns Leicester City Football Club since 2010. The club, which won the English Premier League last season, has helped raise pride in international football amongst Thais, who now fondly refer to Leicester as “a Thai team.”
