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AirAsia Bhd is selling up to 182 Airbus jets to firms managed by BBAM Ltd, one of the world's largest aircraft portfolio managers, in a $1.2 billion deal that will help it cut debt and give it firepower to expand further.
With the sale of its leasing operations, Asia's biggest budget airline is cashing in on a booming leasing sector after ordering hundreds of Airbus planes at bargain prices in recent years to become one of Airbus' biggest customers.
The move, which lifted AirAsia's shares 5 percent higher, is part of restructuring efforts that include selling stakes in businesses and revamping associate airlines since the group's finances came under scrutiny three years ago as amounts owed by its associate firms rose.
"Today's sale is much in line with our stated strategy of disposing non-core assets and businesses, an undertaking which we have successfully executed over the last six months - starting with our training centre, ground handling unit and now our leasing unit," AirAsia Group CEO Tony Fernandes said in a statement.
Under the deal, Fly Leasing Ltd, Incline B Aviation Ltd Partnership and Nomura Babcock and Brown will acquire a portfolio of 84 aircraft and 14 engines.
Fly and Incline also plan to acquire 48 planes to be delivered to AirAsia and have an option to acquire a further 50 aircraft to be delivered.
Fernandes, who built AirAsia up from a two-plane operation in 2002, had been exploring a sale of the leasing operations for the past two years.
AirAsia said the sale will raise about $902 million in cash proceeds and result in a profit gain of approximately 967.1 million ringgit ($246 million). The deal will also see AirAsia take a 10.2 percent stake in Fly.
"It's a very positive deal, overall. Taking in all the gains from this sale, as well as the disposals of the training centre and the ground handling unit, shareholders could expect a good special dividend payout," said one Kuala Lumpur-based analyst, declining to be identified as he was not authorised to speak to the media.
AirAsia's shares have risen 36 per cent for the year to date, giving it a market value of around $3.9 billion.
Credit Suisse, BNP Paribas and RHB acted as joint financial advisors to AirAsia.
($1 = 3.9275 ringgit)