March 21, 2019

Lion Air begins prep work for IPO

Indonesia’s Lion Air has begun preliminary work on an initial public offering (IPO) that has been delayed multiple times over the past five years.

A decision on the IPO will only be made after Indonesian investigators release a final report on the crash of Lion Air’s B-737max aircraft that killed 189 people on board in October 2018, and after feedback from potential investors.

The report is expected to be released in August.

Lion Air, which has affiliate airlines in Malaysia and Thailand, has informally hired advisers for the IPO and is working with those advisors on non-deal roadshows.

Lion Air has not set a target for fundraising, but one source estimated that the carrier to seek to raise as much as $1 billion.

Privately owned Lion Air has long toyed with a flotation, only to conclude that the airline could fund some of the industry’s biggest multi-billion dollar Airbus and Boeing orders from its own operations and bank financing.

The bulk of demand for any deal will have to come from investors outside Indonesia.

Lion Air is part of the Lion Air Group, which also operates airports in Indonesia and aircraft maintenance facilities.

Lion Air has previously talked about plans for an IPO, but has never followed through, having aborted plans in 2014 and 2016.