Wednesday, December 18, 2013

Airasia X

When Maybank ceased stabilizing action for Airasia X Bhd on Aug 7 2013, many investors were unhappy with the decision of the investment bank, which acted as a stabilizing manager, as its inaction had indirectly led to the share price falling below the IPO level.

The bank still had some 53 million shares available for purchase under the price stabilizing mechanism during the nine days before the 30 days were up but it did not continue to acquire the shares.

Maybank IB ceased stabilization on Au 7 2013, the last trading day at the end of the max stabilization period allowed under the SC guidelines.

Instead, Maybank IB exercised the over allotment option for the remaining 45% and returned proceeds of some rm66.2 million to share lenders, in this case Orix Airline Holdings Ltd and Menara Malaysia I Ltd. Tan Sri Tony is the controlling shareholder.

Maybank IB would have purchased a total of 118.5 million AAX shares from the price stabilizing programme of 65.53 million shares and the exercise of the over allotment option, fully covering the number of shares that had been over allocated in the IPO exercise. The 118.5 million shares represent 15% of the total number of IPO shares over allotted in the exercise.

Technically, the bank did not breach any regulation. But without buying support from the stabilizing manager, the counter continued to fall.

According to sources, Maybank IB did not continue to purchase AAX shares during the remaining period was to allow the market to dictate the price.

The management also dismisses the notion that share lenders had requested that Maybank IB not purchase the remaining 53 million shares under the over allotment option, as they wanted the proceeds returned to them instead of the shares.

No comments:

Blog Archive


Please note that all data given are merely blogger's opinion. It is strongly recommended that you do your own analysis and research before investing.