Malaysia’s AirAsia sells aircraft leasing unit for $1.2b

A member of ground staff walks under the wing of an AirAsia plane at Kota Kinabalu airport, Malaysia, November 30, 2015. REUTERS/Olivia Harris/Files

AirAsia Bhd, Malaysia’s flagship budget airline, said on Thursday it has agreed to sell its aircraft leasing operations for $1.2 billion to firms managed by BBAM Limited Partnership.

The sale is part of AirAsia’s efforts to sell non-core assets and will allow it to cut debt while ridding itself of the financial commitment of owning aircraft.

The sale raises approximately $902 million of cash proceeds and gives AirAsia’s unit, Asia Aviation Capital Ltd, an enterprise value of $2.85 billion.

Fly Leasing Ltd, Incline B Aviation Ltd Partnership and Nomura Babcock and Brown will 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.

As part of the deal, AirAsia will also take a 10.2 percent stake in Fly, valued at $50 million.

AirAsia is expected to recognise a gain of approximately 967.1 million ringgit ($246 million) as a result of the leasing unit sale, AirAsia said in a statement.

AirAsia Group CEO Tony Fernandes said the deal was in line with the group’s strategy of disposing non-core assets and businesses, to focus on digital businesses.

“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,” he said.

AirAsia has sold its training centre as well as a ground handling unit in the last six months.

AirAsia halted trading for the first half session on Thursday.

Reuters

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.