Milbank LLP advised AirAsia Berhad (AAB), Asia’s largest low-cost airline, on an agreement to sell its aircraft leasing operations to BBAM Limited Partnership (BBAM), one of the world’s largest dedicated managers of investments in commercial jet aircraft. A wholly owned subsidiary of AAB, Asia Aviation Capital Ltd (AAC) will sell the aircraft leasing operations to BBAM-managed entities for a total disposal consideration of US$1.18 billion, valuing AAB at an enterprise valuation of $2.85 billion – the largest deal of its kind in Asia to date.
The BBAM-managed entities FLY Leasing Limited (FLY), Incline B Aviation Limited Partnership (Incline), and Nomura Babcock and Brown (NBB) will acquire 84 aircraft and 14 engines. The transaction also has a complex forward-looking component involving the sale and potential sale of yet-to-be delivered aircraft to FLY and Incline of just under 100 aircraft.
AAB will receive both cash and non-cash consideration resulting in AAB owning a stake in both FLY and Incline.
The Milbank team was led by Singapore-based partner Paul Ng, who heads Milbank’s aviation and asset finance practice in Asia.
Mr. Ng said: “We are delighted to have advised AirAsia Berhad on another landmark transaction. This transaction will empower AAB to further pursue its strategic goals while cultivating a long-term, mutually beneficial relationship with global aviation player BBAM. We have seen staggering growth in the Asian aviation market in recent years and look forward to continuing to advise AAB as the airline grows and thrives in this dynamic market.”
The transaction is expected to close in the second and third quarters of 2018.
