BBAM Entities, a unit of Boeing Capital Corporation and BNP Paribas Leasing Solutions, acquired Asia Aviation Capital (AAC), an aircraft leasing subsidiary of AirAsia Group, for $1.2 billion in a deal that closed on April 6, 2023.
| Deal-at-a-Glance | |
|---|---|
| Acquirer | BBAM Entities (US) |
| Target | Asia Aviation Capital (MY) |
| Type | Acquisition |
| Closing Date | April 6, 2023 |
| Annc. Date | April 6, 2023 |
| Deal Value | $1.2 billion |
| Buy-side Advisors | Credit Suisse, BNP Paribas, RHB |
| Sell-side Advisors | Milbank, ZICO |
AirAsia Group is divesting its aircraft leasing portfolio to streamline operations and focus on digital initiatives. The deal encompasses a fleet of 84 Airbus A320s and 14 engines, with the majority being leased back to AirAsia under operating leases.
Strategic Rationale
AirAsia Group is pivoting towards non-traditional revenue streams such as digital services and e-commerce. The sale of AAC allows the company to divest from its aviation leasing business, thereby freeing up capital for future growth opportunities in emerging markets.
Financial Context
The acquisition includes a provision where Fly Leasing, a BBAM entity, will issue $50 million in American Depository Receipts (ADRs) to AirAsia Group. This investment gives AirAsia a 10.2% stake in Fly Leasing, enabling the company to retain some financial benefits from its aircraft leasing activities.
Outlook
The deal marks a significant shift for AirAsia as it transitions towards digital services and other non-core aviation businesses. Industry experts predict this move will enable the airline group to enhance its operational efficiency and financial flexibility in the coming years.