AirAsia confirms Castlelake’s interest, but no deal inked yet

This article first appeared in The Edge Financial Daily, on December 14, 2018.
-A +A

KUALA LUMPUR: AirAsia Group Bhd says it has received “no less than 13 expressions of interest and also offers” from prospective buyers, including US private investment firm Castlelake LP, for its aircraft leasing unit and a number of its remaining aircraft assets.

In a filing with the local stock exchange yesterday, AirAsia said the company, however, has not entered into any legally binding contract with any of the parties involving the sale of the leasing unit or a significant number of aircraft, “with values over and above the prescribed thresholds under the Main Market Listing Requirements of Bursa Malaysia Securities Bhd”.

“The company shall make the necessary announcement(s) as appropriate when there is a decision by the board,” it added.

The group was clarifying a recent Reuters report that stated that Castlelake had struck a deal to buy a portfolio of about 30 narrow-body planes from it for a total price of roughly US$800 million (RM3.34 billion).

In the report, the news agency wrote that the deal marked another move for AirAsia to monetise its assets as it seeked to transform itself into an asset-light, digitally focused firm. It also wrote that Asia’s biggest budget airline was cashing in on a booming leasing sector after ordering hundreds of Airbus SE planes at bargain prices in recent years.

The report also noted that earlier this year, AirAsia agreed to sell part of its aircraft leasing portfolio in a staggered deal for US$1.2 billion to firms managed by BBAM Ltd, one of the world’s largest aircraft portfolio managers.

At 3.10pm, AirAsia shares rose 10 sen or 3.94% to trade at RM2.64, giving it a market capitalisation of RM8.82 billion.