KUALA LUMPUR: AirAsia Bhd is a step closer to setting up a joint-venture low-cost airline operation in China, having received a business licence approval on Nov 13 from the local government (via unit AirAsia Investment Ltd) and incorporated a wholly-owned subsidiary.
In a filing with Bursa Malaysia on Wednesday, AirAsia said the new subsidiary, AirAsia (Guangzhou) Aviation Service Ltd Company, was expected to have issued share capital of US$1mil.
“The main objective of establishing the subsidiary is to have an aviation and commercial services company in China. The incorporation of the subsidiary is not expected to have any immediate effect on the issued and paid-up share capital or substantial shareholders’ shareholding in AirAsia,” it said.
On Sept 25, AirAsia inked a non-binding term sheet with Everbright Financial Investment Holdings, Plato Capital Ltd and Oxley Capital Ltd to supplement a memorandum of understanding (MoU) dated May 14 between it, Everbright and Henan Government Working Group for purposes of setting up a JV in China to operate a low-cost aviation business.
China-based Everbright is a conglomerate focusing mainly on financial services.
Plato, listed on the Singapore Exchange, is involved in hospitality, education and precision engineering sectors while Oxley is part of the Oxley Group, a Singapore-headquartered private investment firm.
According to the announcement on the MoU, the JV will also look into developing infrastructure apart from setting up a JV low-cost airline.
The JV will invest in the development of a low-cost carrier terminal, an aviation academy for pilots, engineers and crew training as well as a maintenance, repair and overhaul provider in Zhengzhou, which is intended as AirAsia China’s operating base and headquarters.
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