When Stanley Choi became one of AirAsia Group Bhd.’s biggest shareholders a month ago, he did so with no intention to pursue the aggressive tactics favored by activists in Europe and the U.S. Instead, he saw an opportunity to create a buzz.
Choi, a poker-playing Hong Kong financier, boosted his stake in the Malaysian budget carrier to almost 9% on Feb. 18 in a private placement at a cost of about $27 million. He hadn’t previously been looking to invest in the travel industry.
“If I bet on Boeing or American Airlines, I probably wouldn’t be seen in any media,” 51-year old Choi said in an interview in his penthouse office in Hong Kong. “With this kind of size, no big airline would pay any attention.”
The shares have surged more than 50% since his stake purchase was made public.
Choi said he went into the investment without an exit strategy or an ideal return rate, and has yet to meet the two founders Tony Fernandes and Kamarudin Meranun in person. He bought the shares about seven months after the firm’s auditor Ernst & Young said the carrier’s ability to continue as a going concern may be in “significant doubt.” The statement triggered an 18% plunge in AirAsia’s shares on the day.
“If it can survive, its stock price should be much higher than where it is now,” said Choi, who is chairman and founder of local brokerage Head & Shoulders Financial Group. “If it cannot survive, the rest of the aviation companies won’t be able to survive either. AirAsia will be one of the last groups to fall.”
Like most airlines around the world, AirAsia has been hit hard by the coronavirus pandemic and its devastating impact on travel. The company’s Japanese unit filed for bankruptcy in November and a month later it sold its stake in AirAsia India Ltd. to local partner Tata Sons Ltd. Long-haul unit AirAsia-X, meanwhile, is undergoing debt restructuring and has been essentially grounded by the virus.
Choi is used to playing the odds. He won more than HK$50 million ($6.4 million) as first prize in a super high-roller poker championship in Macau in 2012. A framed photo of him holding the outsized check sits on a side-table in his office in Hong Kong’s Central district.
While he was initially skeptical of the investment in AirAsia, which he came across via “some common friends” in Malaysia, he said he is confident in the ability of Fernandes and Kamarudin as “world-class entrepreneurs” to lead the airline out of its difficulties.
“As long as they keep running and keep creating value for their passengers and clients, the market will reward us,” Choi said. “The aviation industry has bottomed out.”
A second private share placement saw billionaire David Bonderman and several partners of TPG Capital, the private equity firm he co-founded, emerge as shareholders, along with Aimia Inc., AirAsia said in a statement Wednesday. Choi didn’t take part.
Choi hasn’t always made the right call. In 2018, International Entertainment Corp. – a company he controls – bought Wigan Athletic, a U.K. soccer team, before selling it to fellow Hongkonger Au Yeung Wai Kay last year. Just weeks later, Au Yeung put the club into administration, generating a stir in British media.
“It was a mistake, not a good decision to buy for sure,” Choi said.
Choi now has a way to deal with misfortunes. He had the phrase “let it be” tattooed on the inside of his left forearm in cursive script in December, which he looks at to calm himself in times of trouble.
“My poker master told me that you shouldn’t get mad because of the result,” Choi said, the scent from a recently smoked cigar lingering in his office. “You only get mad because the way you play didn’t fit yourself.” Kiuyan Wong, Bloomberg
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