AirAsia sells AACE stake to CAE Inc

By MARK RAO / Pic By MUHD AMIN NAHARUL

AirAsia Bhd has signed a deal to sell its entire 50% stake in Asian Aviation Centre of Excellence Sdn Bhd (AACE) to CAE Inc for RM429 million.

The divestment involved the sale of 82.78 million shares in AACE to the Canadian flight simulator manufacturer, which owns the other 50% of the company.

The low-cost carrier in a statement said the entire divestment in AACE was part of the company’s strategy to dispose of non-core assets.

CAE partnered AirAsia in a joint-venture (JV) firm to create AACE which provides training services for pilots, cabin crew, engineers, ramp handlers, guest services and aviation management.

The budget airline told Bursa Malaysia it will continue to dispose of non-core investments and return the proceeds as dividends to shareholders, as the frills-free carrier focuses on its core business and ancillary services.

“The sale of AirAsia’s equity shares in the JV company will allow the company to realise substantial gains on its disposals and augment its liquidity,” AirAsia said.

“In the long run, the transaction allows AirAsia to concentrate on its core business by completely outsourcing its training needs to CAE Group and also avoiding making further significant capital investments in the JV company.”

In a previous interview with The Malaysian Reserve, group CEO Tan Sri Dr Tony Fernandes (picture) said two of AirAsia’s non-core assets are expected to be disposed of in the next four months. The AACE disposal is expected to result in a gain of RM304.8 million in the fourth-quarter.

AirAsia said the proceeds from the sale will go towards AirAsia’s working capital and increasing the airline’s liquidity.

The sale is expected to be completed by the end of November this year.

The deal was inked at CAE Inc’s headquarters in Montreal last Thursday. Fernandes was at CAE’s headquarters in Montreal to announce the AACE-CAE deal.

Reuters earlier reported that Fernandes also said the sale of the budget airline’s aircraft leasing arm Asia Aviation Capital Ltd “is imminent”.

The aircraft leasing arm is expected to be disposed to Korea Transportation Asset Management Co Ltd.