BBAM Buys Asia Aviation Capital Portfolio
Airfinance Journal | March 1, 2018
BBAM-managed entities have agreed to buy Airasia's captive lessor Asia Aviation Capital (AAC) for $1.18 billion, according to a Bursa Malaysia filing.
Under the terms of the agreement, FLY Leasing, Incline B Aviation (Incline) and Nomura Babcock and Brown (NBB) 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. FLY and Incline have also entered agreements to acquire 48 aircraft on order by Airasia, and taken an option to acquire a further 50 aircraft to be delivered.
As part of the disposal consideration, Airasia will also receive non-cash considerations of $50 million in FLY American Depositary Shares, resulting in Airasia owning approximately 10.2% of FLY. Airasia will also commit $50 million into Incline Parallel Funds, which will invest alongside the Incline Aviation Master Fund in global aviation investments. As a result of the disposal, Airasia is expected to recognise a gain on sale of approximately MYR 967 million ($246 million).
Harry Forsythe, AAC's deputy chief executive officer and chief commercial officer, tells Airfinance Journal that BBAM is "acquiring the assets only" and not the platform. He referred all other questions to BBAM, including a question about whether any other companies could still purchase the AAC platform or parts of the portfolio.
On 28 February, a source with direct knowledge of the matter said Korea Transportation Asset Management (KOT AM) was still looking at AAC.