The family of businessman and Rep. Michael “Mikee” Romero is in talks to buy out the remaining Filipino co-founder of AirAsia Philippines, cementing its control over the budget airline, the Inquirer learned.
The discussions come as AirAsia Philippines, which is part of the AirAsia Group of Malaysia, undergoes a major recapitalization effort ahead of a planned $200-million initial public offering.
A source with direct knowledge of the matter said Romero-controlled F&S Holdings was negotiating with businessman Antonio “Tonyboy” Cojuangco’s TNR Holdings, which owns about 15 percent of AirAsia Philippines’ operator, AirAsia Inc.
A successful deal will increase F&S Holdings’ almost 45-percent stake to about 60 percent. The remaining 40 percent of AirAsia Inc. is held by AirAsia Group CEO Tony Fernandes and the company’s executive chair, Kamarudin Meranun.
The source said the parties were in talks over pricing and that an agreement could be sealed within September. Officials from F&S and TNR could not be immediately reached for comment.
Cojuangco and Romero are co-founders in AirAsia Philippines, which was established as a joint venture with the AirAsia Group almost a decade ago.
The talks are the latest in the family’s bid to gain a controlling stake in the airline, which competes with bigger domestic players Philippine Airlines (PAL) and Cebu Pacific Air for local and regional market share.
The Romero family last June bought out the shares of another co-founder, Marianne Hontiveros, and Zest-O owner Alfredo Yao. Yao entered the company in 2013 after his airline, Zest Air, was acquired by AirAsia.
Romero, who holds the reputation as the richest member of the House of Representatives with a 2018 net worth of more than P7.8 billion, has businesses in logistics and power. He also owns the professional NorthPort Batang Pier basketball team.
There were also changes in the board composition of AirAsia Inc. to reflect the Romero family’s increased holdings, a source said, citing a meeting last Aug. 26.
Hontiveros, who was company chair, retired and was replaced by Romero lawyer Jomar Castillo. Another family lawyer, Ronald Policarpio, was named director while Romero’s spouse, Sheila, was named vice chair.
On the Malaysian side, Fernandes stepped down in favor of AirAsia chief financial officer Pattra Boosarawongse, the source said.
The Romeros’ move to consolidate their holdings is unfolding as AirAsia Philippines is poised for a financial turnaround this year. Its second quarter 2019 earnings showed that the budget airline reported a net income of P593 million—a gain of 777 percent. Revenues jumped 38 percent to P7.5 billion as it ramped up flight operations.
At the same time, AirAsia Philippines is undergoing an P18-billion recapitalization involving the issuance of common and preferred shares.
The company earlier set aggressive growth targets moving forward. Romero said the airline was targeting to grow its fleet of 23 Airbus A320s to 50 aircraft in the next few years. Revenue for 2019 is forecast at P30 billion, higher by half than 2018, and could reach P50 billion in three years, he said.