Jakarta — The Indonesian government may cancel the acquisition of local airline Batavia Air by Malaysia’s AirAsia Bhd and its Indonesian partner, if the transaction breaches the ownership limit imposed on foreign companies in national airlines.
The English weekly, Sunday Post, qouted the Director General of Indonesian Transportation Ministry Herry Bhakti Gumay as saying that AirAsia and its partner in the acquisition, PT Fersindo Nusaperkasa, had yet to report their acquisition to the ministry.
“We will give Batavia, AirAsia and Fersindo Nusaperkasa one month to report their plan to us. We will cancel the acquisition process if Indonesia is not the majority shareholder,” Herry was quoted saying.
Herry also said the ministry would not hesitate to revoke Batavia Air’s flight permit.
AirAsia and its Indonesian partner Fersindo, owner of a 51 per cent stake in Indonesia AirAsia (IAA), signed an agreement on Thursday to buy Metro Batavia, the owner of Batavia Air, for US$80 million (Rp 756 billion).
According to the acquisition plan, AirAsia would own a 49 per cent stake in Metro, while Fersindo the remaining 51 per cent in order to comply with Indonesia’s ownership rule.
Seventy-six per cent of the shares are due to be purchased this year and the remainder by 2013, the weekly reported. Previously, AirAsia Group CEO, Tan Sri Tony Fernandes, had said in a statement that the Batavia Air acquisition was a fantastic opportunity for AirAsia to accelerate its growth plans in one of the most exciting aviation markets in Asia; and that it further underlined its belief in the growth potential of Indonesia’s aviation sector.
New Straits Times