AirAsia sells 50% stake in AACE for RM429.3mil

Asset disposal: Passengers wait to check in at AirAsia counters for their flights at Don Muang International Airport in Bangkok. Sources say AirAsia is looking to sell a majority stake in its leasing unit Asia Aviation Capital but is also open to a full sale.

KUALA LUMPUR: AirAsia Bhd has sold its entire 50% stake in its joint venture with aviation training provider CAE for US$100mil (RM429.3mil) in a bid to focus on its core business. 

In a filing with Bursa Malaysia issued on Friday, the company said it has executed a share purchase agreement with CAE to cede full control of Asian Aviation Centre of Excellence (AACE).

Its assets include three training centres in Sepang, Singapore and Ho Chi Minh as well as a share in the Philippine Academy of Aviation in Manila.

Established in 2011, AACE,formerly kown as the AirAsia Academy, was set up to provide aviation-related training services for pilots, cabin crew, maintenance engineers, technicians and ground services personnel.

"AirAsia is rich in assets but our core business is passenger service and
ancillary, and we will continue to regularly dispose of non-core investments and dividend most of it out,subject to board approval," AirAsia said in the bourse filing. 

CAE will remain as AirAsia Group's exclusive training partner, having extended its existing training contract for AirAsia and its affiliates to 2036.

The group said in its filing that it expects the transaction to result in a gain on disposal of RM304.8mil in the fourth quarter of FY2017 from the transaction.

The net assets and cash balance of the Company shall increase by RM304.8mil and RM386.4 mil respectively while a total gain of RM187.6 million will be recognised at group consolidated level, it said.

At the time of writing, AirAsia's share price is up 3 sen or nearly 1% to RM3.31 on volume of 8.08 million shares.