KUALA LUMPUR (May 22): AirAsia Bhd's Philippines unit (AirAsia Philippines) is looking at a market value of at least US$500 million (RM1.8 billion) under its planned initial public offering (IPO), the Philippine Daily Inquirer reported today.

The Philippine Daily Inquirer, quoting the Philippines-based AirAsia Inc vice chair Michael Romero as saying in an interview that the group had planned to undertake the IPO within the next two years. AirAsia Bhd (fundamental: 0.2; valuation: 0.8) owns 40% in AirAsia Philippines.

"We are looking at a (float) of 30% to 40%," Romero was quoted as saying. This indicates that AirAsia Philippines can raise as much as US$200 million from the IPO.

According to the report, AirAsia Philippines operated 15 Airbus A320s at the end of last year.

AirAsia Philippines, which controls some 10% of the Philippines' aviation market, competes against names like Philippine Airlines and Cebu Pacific there.

AirAsia Bhd had earlier extended financial assistance to AirAsia Philippines. On February 26 this year, AirAsia Bhd told Bursa Malaysia it had given US$22.34 million in the form of loans to its Philippines unit.

The loan was intended to "facilitate the ordinary course of business" of the Philippines entity, according to AirAsia Bhd.

At 10.18am, AirAsia Bhd shares fell three sen or 1.4% to RM2.13 for a market capitalisation of RM5.92 billion.

The stock had fallen 22% this year, underperforming the FBM KLCI's 2% rise.

(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)