King Power Group’s Chairman Buys 39% Stake in Asia Aviation (Thai AirAsia)

King Power Group’s Chairman, Mr. Vichai Srivaddhanaprabha has purchased a 39% stake in Asia Aviation PCL (AAV), valued at around 7.945 billion Baht from Mr. Tassapon Bijleveld.

Mr. Vichai said he is hoping that the acquisition of shares in AAV – a major shareholder in Thai AirAsia (TAA) with 55% of the share capital in the Thai low-cost carrier – will have a positive synergy when partnering the airline business with King Power, currently the sole duty free operator in Thailand.

Mr. Tassapon will remain as the CEO of AAV and TAA, and will continue to lead the airline’s current business plan and growth strategy.

Mr. Aiyawatt Srivaddhanaprabha, Mr. Apichet Srivaddhanaprabha, and Mr. Sombat Dechapanichkul will be appointed directors of AAV, with the task of identifying and planning the company’s vision and business strategies together with Mr. Tassapon and the management of TAA.

It is expected that post-acquisition of the AAV shares from Mr. Tassapon, in compliance with the Notification of the Capital Market Supervisory Board No. TorChor. 12/2554 regarding Rules, Conditions and Procedures for the Acquisition of Securities for Business Takeovers, Mr. Vichai will announce a mandatory tender offer for the remaining 60% of AAV's shares listed on the Stock Exchange of Thailand, at 4.20 Baht per share, worth a total value of 12 billion Baht.

Siam Commercial Bank will act as the financial advisor and a financial support for this Tender Offer while an announcement of the intention to Make the Tender Offer (Form 247-3) was submitted this morning (14 June 2016) to the Securities and Exchange Commission. The Tender offer for Securities (Form 247-4) is expected to be submitted to the Securities and Exchange Commission on 23 June 2016.

Mr. Tassapon Bijleveld, Chief Executive Officer of Thai AirAsia said that his decision to sell his and his family's substantial interests in AAV at 4.20 Baht per share – a price substantially lower than the current market price – came about as a result of laws and regulations that govern airline businesses in Thailand, where at least 51% of shares in an air operator must be held by Thai individuals. 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 price of 7.945 billion Baht for 1.892 billion shares in AAV (calculated to be around 39% of total share capital of AAV).

Mr. Tassapon, who previously held 44% of the shares in AAV, will continue to hold a 5% stake in AAV after the tender offer.

"Please rest assured that the management, myself included, will continue the good work at TAA as we have always done since day one when we pioneered the low-cost carrier market in Thailand 13 years ago," said Mr. Tassapon. "Fully dedicated and fully focused, TAA will continue to grow and invest as planned for in 2016, accepting delivery of 51 new aircraft which, together with our existing fleet, will fly our estimated 17 million passengers to various destinations across the region. We will also look to further expand our flight network within ASEAN, as well as routes to China and India, and with the support of Mr. Vichai's King Power Group we may well see the company's growth accelerated beyond what was originally anticipated."

AirAsia Group CEO Tony Fernandes said, "This investment proves that Thai AirAsia's value proposition remains undiminished. The vote of confidence that comes from one of the most successful family businesses is fantastic. The potential tie-ups between AirAsia and King Power, Thailand's sole duty-free operator, are massive and we look forward to working together, not only in Thailand but across the group and ASEAN."

China

The CEO of King Power Group, Mr. Aiyawatt Srivaddhanaprabha, highlighted how Thai AirAsia carries the most passengers between the Thailand and China, and said, "It is not difficult to see how an alliance with TAA will promote King Power's retail business in the Chinese market. TAA and King Power will team up to develop their brands, products and services together, with the aim of providing customers with international-quality shopping and travel experiences at affordable prices."

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