Malaysian tycoon discussing stake Valuair
Malaysian tycoon discussing stake Valuair
Associated Press, Kuala Lumpur
A Malaysian tycoon's airport management company is in talks with Singapore's Valuair Ltd. over acquiring a stake in the budget airline, a news report said on Monday.
Malbbsia's Senai Airport Terminal Services, or SATS, has agreed to sign a preliminary non-binding agreement to explore the possibility of SATS providing fresh financing in return for equity in Valuair, the Malay Mail reported, citing unidentified sources.
Valair is seeking as much as US$25 million in fresh capital for expansion, which should help the carrier meet a self-imposed deadline to list on the Singapore Stock Exchange by 2006, the daily said.
SATS - controlled by one of Malaysia's top businessman, Syed Mokhtar Al Bukhary - operates the Senai Airport in Malaysia's southern state of Johor, which is separated from Singapore by a tiny strip of water.
SATS officials weren't immediately available for comment.
Valuair currently operates flights to Bangkok, Hong Kong, the Indonesian capital of Jakarta, and Perth in Western Australia.
It was the first of three budget carriers to begin operations from Singapore last year.
The others are Singapore Airlines Ltd.-backed Tiger Airways and Jetstar Asia, which is majority-owned by Australia's Qantas Airways Ltd.
In December, Malaysia's Star Cruises acquired a 20 percent stake in Valuair, making it the airline's largest shareholder.
The strategic alliance with the world's third-largest cruise operator is part of Valuair's continuing second round of financing aimed at helping the airliner eventually buy wide-body airplanes so that it can fly to more distant destinations.
Valuair raised about $22.3 million in the first phase of financing before it started up around May 2004.
At the time, Valuair Chairman Lim Chin Beng, a former top executive at Singapore Airlines, said the airline was in talks with two other parties for capital-injection needs.
Online travel-booking company Asiatravel.com Holdings Ltd., which has pumped $4 million so far into Valuair, currently owns 10.8 percent of the airline.