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King Power Becomes Thai AirAsia Number 2 Stakeholder
16th Jun 2016
Largest Thai duty-free corporation King Power has bought a 39 per cent stake in the country’s largest budget carrier Thai AirAsia for US$225 million. This makes King Power the airline’s number two stakeholder behind Asia Aviation, which owns 55 per cent, the rest is owned by Tony Fernandes’ AirAsia Group.
Mr Vichai bought the stake from Thai AirAsia Chief Executive Officer Tassapon Bijleveld. Mr Bijleveld will keep 5 per cent of the shares as well as stay as CEO of Asia Aviation.
Before selling the stake to King Power, Thai AirAsia management had a combined 45 per cent share in Asia Aviation.
Thai AirAsia plans to serve 16.9 million passengers in 2016 by expanding into China and India.
The purchase allows Vichai Srivaddhanaprabha, King Power’s owner to further expand his portfolio beyond duty-free and hotel businesses into tourism and aviation. Mr Vichai said yesterday that buying stake in Thai AirAsia opens new business opportunities for his company.
Mr Vichai said King Power joined forces with Thai AirAsia to expand its retail business and distribution.
In a statement, the duty-free conglomerate said it was able to get shares at a “substantially lower” price than the market rate because local carriers must be more than 50 per cent legally owned by Thais.
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.
King Power is Worth US$2.9 Billion
Mr Vichai founded King Power back in 1989, with only a single store in Bangkok. Since then he has made it into a conglomerate with a projected value of US$2.9 billion. A lot of this success is due to King Power receiving a duty-free concession at Suvarnabhumi Airport in Bangkok in 2016. This has allowed King Power to tap into a huge market, populated by millions of customers.
He is also the owner of the English football club Leicester City, which has won this year’s Premier League for the first time in its history.
King Power said it plans to buy the rest of Asia Aviation by spending 12 billion baht on it.
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