CAE to buy AirAsia's stake in AACE for US$100m

CAE International Holding Ltd (CAE), a global leader in training for civil aviation, defence and security, and healthcare markets, is acquiring AirAsia Bhd’s entire 50 percent stake in Asian Aviation Centre of Excellence (AACE), which is currently a 50:50 CAE-AirAsia joint-venture, for US$100 million (RM429.3 million).

The transaction (including earn-out) would give CAE full control over AACE’s three training centres located in Sepang (Malaysia); Singapore; and Ho Chi Minh City (Vietnam), as well as its share of the Philippine Academy of Aviation Training (PAAT), a joint-venture training centre between AACE and Cebu Pacific, located in Manila, Philippines.

This new agreement was a natural evolution of the relationship and a win-win for both organisations said AirAsia and CAE in a joint-statement released here.

“It allows AirAsia to concentrate on its core business by completely outsourcing its training needs to CAE, and it allows CAE to expand its footprint in the Asia Pacific, the fastest-growing aviation market,” said Marc Parent, CAE President and Chief Executive Officer (CEO).

Long-term plans to monetise assets

AirAsia Group CEO, Tony Fernandes said the group would continue to regularly dispose of non-core investments and dividend, subject to board approval.

“AirAsia is rich in assets but our core business is passenger service and ancillary. This stake sale is just part of our long-term plan to monetise all our assets. We are also working on several other divestments of valuable assets including our leasing arm, which is imminent,” he added.

AACE offers training for pilots, cabin crew, maintenance engineers, technicians and ground services personnel on Airbus A320, A330 and Boeing B737NG platforms.

Meanwhile, AirAsia in a filing to Bursa Malaysia said the sale of its equity shares in the joint-venture company would allow it to realise a substantial gain on disposal and augment its liquidity.

The transaction will see it realise a gain on disposal of RM304.8 million in the fourth quarter of the year.

"The net assets and a cash balance of the company will increase by RM304.8 million and RM386.4 million, respectively, immediately after the sale and a total gain of RM187.6 million will be recognised at group consolidated level," it added.

- Bernama

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