Bangkok Airways has cleared the last major hurdle in its long-delayed plan to list on the Thai bourse with the debut now expected later this year.
The 46-year-old privately-owned carrier has managed to come to an agreement with the Securities and Exchange Commission (SEC) on the company’s accounting system, according to sources familiar with the matter.
The SEC was sceptical that the airline might, among other things, understate its liability particularly that which involved the Samui Property Fund (SPF), which owns Samui Airport. SPF is a major asset of Bangkok Airways.
There were also previous tax issues with the SEC involving SPF.
The SEC regarded SPF’s accounts as not complying with local practice and wanted sanctions imposed.
But the SEC finally agreed to remove the regulatory barrier and an announcement signalling a green light for Bangkok Airways’ initial public offering (IPO) launch is expected within the next three weeks.
“The differences [with the SEC] have been resolved and an agreement has been reached,’’ the source said.
The IPO could be launched between mid-year and the third quarter, although an airline insider, who spoke on condition of anonymity, insisted that the airline is not in a rush.
However, Prasert Prasarttong-Osoth, the airline’s founder who has an 80% stake in the full-service airline, told the Bangkok Post that the IPO should get off the ground within this year.
The multi-billion-baht proceeds from the IPO will be needed to move several key investment projects ahead, he said.
This includes the fleet-wide renewal plan which will also see up to 30 new-generation single-aisle jets, valued at $3 billion, being acquired. Other projects are a new aircraft maintenance, repair and overhaul hangar at Suvarnabhumi airport which was estimated to cost about 2 billion baht, and an IT system upgrade.
The airline’s management and owners, with the help from Bualuang Securities, its IPO adviser, has yet to decide on the exact size of the share divesture, though the minimum was set at 25%.
The stock market doldrums and negative economic outlook resulting from political unrest are issues which the airline has to deal with in determining how many shares it wants to sell and at how much.
However, in its filing with the SEC in July last year, the airline said it planned to list 730 million shares, of which 520 million would be new shares and the remainder existing ones.
Airline executives last year estimated that 10 billion baht in proceeds could be raised through the sale of up to 30% of its shares in a partial divestiture that would end its 46-year full private ownership.
The airline also has various aviation-related subsidiaries, including ground-handling, air-cargo and catering services.
Bangkok Airways aims to finalise its jet fleet renewal this year, though executives insist that it is not under pressure to make a decision soon as the existing aircraft line-up can meet its requirement until 2016.
The airline’s single-aisle jet fleet now comprises 10 Airbus 319s and five A320s.
In addition, it operates eight ATR 72-500 turboprop regional aircraft which will be replaced in the future by ATR 72-600s.
Last month, Bangkok Airways placed an order worth US$200 million with turboprop maker ATR for six aircraft.