Yao willing to give up control of ZestAir

MANILA, Philippines - AMY Holdings, the flagship firm of Ambassador and businessman Alfredo M. Yao, is willing to become a minority shareholder of Zest Airways Inc. by divesting additional shares in the budget airline to AirAsia Inc. (Philippines).

Yao told The STAR in a chance interview that his holding firm was willing to surrender control of ZestAir to the Philippine unit of low cost carrier AirAsia Berhad Group.

“I am willing to become a substantial minority shareholder,” he stressed.

He did not elaborate how much interest AMY Holdings would retain in ZestAir and how much the buyout would cost.

“Everything depends on the negotiations,” he added.

AirAsia Philippines and ZestAir entered into a strategic alliance agreement last March 11. Last May 10, AirAsia Philippines completed the acquisition of an 85 percent economic interest and 49 percent voting rights in ZestAir as well as a 100 percent interest in Yao’s Asiawide Airways Inc.

 In exchange, Yao’s ZestAir got $16 million as well as 13-percent interest in AirAsia Philippines.

ZestAir is controlled by Yao’s AMY Holdings while AirAsia Group through chief executive officer Tan Sri Tony Fernandes has a 40 percent interest in AirAsia Philippines together with Filipino shareholders including Marianne Hontiveros, Antonio “Tonyboy” Cojuangco Jr., and Michael Romero who own a combined 60 percent.

After the transaction, the shares of Hontiveros, Cojuangco, and Romero in AirAsia Philippines were diluted with the entry of Yao while the AirAsia Group maintained its stake at 40 percent.

Hontiveros, who is also president and chief executive officer of AirAsia Philippines, said last Sept. 1 that the airline was keen on further increasing its 49 percent stake in ZestAir.

ZestAir has since been rebranded to AirAsia Zest.

ZestAir executive vice president and chief operating officer Joy Caneba earlier said in a press conference that AirAsia Philippines needs to get the go signal from both houses of Congress to further increase its interest in ZestAir.

Caneba pointed out that the airline already informed the committee on franchise of the House of Representatives about its intention to acquire more shares from the Yao Group to increase its interest in ZestAir.

“A franchise is also a law and there is a certain process that we have to go through in both houses. The basic requirement is the intention to acquire more equity and the transfer of controlling interest. You have to inform Congress who will be acquiring and who will be transferring,” she stressed.

Caneba said AirAsia Philippines intends to further increase its 49-percent stake in ZestAir to at least a controlling stake of 51 percent.

Caneba said existing shareholders have committed to pump in $100 million in fresh funds into AirAsia Zest.

The Civil Aviation Authority of the Philippines (CAAP) issued an order grounding the fleet of ZestAir last Aug 16. due to six aviation safety concerns in violation of the Philippine Civil Aviation Regulation (PCAR).