AirAsia transfers 15 aircraft to BBAM for US$201.5m

This article first appeared in The Edge Financial Daily, on September 4, 2018.
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KUALA LUMPUR: AirAsia Group Bhd has received US$201.5 million (RM832.2 million) in gross proceeds from the transfer of 15 aircraft to entities managed by BBAM Ltd Partnership as part of its divestment plan for the aircraft-leasing unit currently managed by wholly-owned subsidiary Asia Aviation Capital Ltd (AACL).

AirAsia said the proceeds include a cash consideration of US$151.5 million cash and 3.33 million FLY Leasing Ltd equities issued at US$15 per FLY depository share to AirAsia in accordance with the FLY subscription agreement.

To date, AirAsia has transferred 54 out of a total 84 aircraft up for transfer, for which the group has already received total gross proceeds of US$703.1 million.

“AirAsia is still on track to complete the disposal of the remaining 30 aircraft and 14 aircraft engines under the Incline B and FLY sale and purchase agreements respectively as planned,” it added in a filing with Bursa Malaysia yesterday.

In March, AirAsia announced the deal with San Francisco-based BBAM, one of the world’s largest managers of investments in leased commercial jets, whereby it would sell its aircraft-leasing operations to BBAM-managed entities, including Herondell Ltd, for US$1.18 billion, valuing the business at an enterprise valuation of US$2.85 billion.

AirAsia is expected to recognise a gain of RM967.1 million on the disposal.