SEPANG, 1 March 2018:
AirAsia Bhd has sold off its wholly-owned aircraft leasing operations Asia Aviation Capital Ltd (AAC) for US$1.18 billion to BBAM Limited Partnership. The deal values AAC at US$2.85 billion.
In a statement, AirAsia said the disposal raises approximately US$902 million of cash proceeds and continues AirAsia’s strategy of divesting non-core assets and focusing on its core airline operating business. With the disposal, AirAsia Bhd is expected to recognise a gain on sale of approximately RM967.1 million.
The deal sees FLY Leasing Ltd, Incline B Aviation Limited Partnership (Incline) and Nomura Babcock and Brown (NBB) acquire a portfolio of 84 aircraft and 14 engines – of which 79 aircraft and 14 engines will be leased back to AirAsia and its affiliates.
FLY and Incline have also entered into agreements to acquire 48 aircraft to be delivered to AirAsia Bhd and an option to acquire a further 50 aircraft to be delivered.
As part of the disposal consideration, AirAsia Bhd will also receive non-cash considerations comprising of US$50 million in FLY American Depositary Shares (ADSs) – resulting in AirAsia Bhd owning approximately 10.2% of FLY.
AirAsia Bhd will also commit US$50 million into Incline Parallel Funds, which will invest alongside the Incline Aviation Master Fund in global aviation investments.
AirAsia Group CEO Tan Sri Tony Fernandes said: “Today’s sale is much in line with our stated strategy of disposing non-core assets and businesses, an undertaking which we have successfully executed over the last six months – starting with our training centre, ground handling unit and now our leasing unit – and unveiling the true value of AirAsia.
“When we bought these planes, our gearing was high and some people could not see why we wanted to own these assets. This deal shows it was the right strategy as we have something of value to dispose in return for cash and an equity relationship in two great companies, while removing residual risks.
”This is a perfect outcome to a strategy we started in 2004 and I’m thrilled at the execution of our long-term vision. We have now disposed of most of our physical non-core assets and we are thrilled to be embarking on our new digital strategy which will build a very valuable group of assets.”