Friday 29 Mar 2024
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KUALA LUMPUR (March 1): AirAsia Bhd's share price rose as much as 25 sen or 5.71% to RM4.63 after it resumed trading this afternoon.

The group requested a trading suspension for its shares in the morning to announce the divestment of its aircraft leasing unit Asia Aviation Capital Ltd (AACL).

As at 3:21pm today, the counter pared some of the gains made to trade at RM4.61, up 23 sen or 5.25%, after 11.91 million shares were done.

In its morning announcement, AirAsia said it is divesting its aircraft leasing business, currently managed by its wholly-owned subsidiary AACL, to entities managed by BBAM Ltd Partnership for US$1.185 billion (RM4.62 billion), on the back of an enterprise value of US$2.85 bilion (RM11.1 billion).

In the Bursa Malaysia filing, AirAsia said AACL has inked three agreements to sell 84 aircraft and 14 aircraft engines to units managed by BBAM, and to leaseback 79 aircraft and 14 aircraft engines.

The BBAM units include FLY Leasing Ltd, Incline B Aviation Ltd Partnership and Herondell Ltd.

All the purchasers are involved in the acquisition, leasing and disposition of commercial jet aircraft and engines. FLY is listed on the New York Stock Exchange.

Apart from existing aircraft, AirAsia and AACL also inked agreements with the same parties to dispose of up to 98 aircraft to be delivered in the future.

The disposal consideration will be settled in US$1.085 billion (RM4.23 billion) cash, US$50 million (RM194.9 million) investment in-kind to BBAM's managed units, namely Incline A Aviation Ltd Partnership and Incline B Aviation Parallel Ltd Partnership, and US$50 million in the subscription of 3.33 million shares at US$15 per share, representing a 10.2% stake in FLY Leasing Ltd.

AirAsia said the disposals could raise gross proceeds of US$901.8 million (RM3.52 billion), RM788.1 million or 22.4% of which will be used for prepayment of bank borrowings, RM112 million or 3.2% for expenses related to the proposed disposal, while the use of the balance RM2.62 billion or 74.4% will be determined later.

 

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