Air Works on the Block as Top In­vestors Look to Exit

Ma­jor­ity share­hold­ers Punj Lloyd Avi­a­tion, GTI Cap­i­tal look­ing to sell stake in 12 months

The Economic Times - - Brands & Companies - Mo­hit.Bhalla@ times­

New Delhi: Air Works, a Gur­gaon-based air­craft main­te­nance and re­pair ser­vice provider that paints a third of all planes pro­duced by Air­bus as per spec­i­fi­ca­tions of the air­lines buy­ing them, is on the block.

Top in­vestors such as Punj Lloyd Avi­a­tion and GTI Cap­i­tal, which to­gether own ma­jor­ity stake in the com­pany, are look­ing to exit the busi­ness in the next twelve months, Air Works man­ag­ing di­rec­tor Vivek Gour said. “We have long-term in­vestors and it is our man­date to pro­vide them liq­uid­ity,” he told ET.

The com­pany ex­pects to be val­ued at .₹ 2,000 crore, Gour said. “The man­age­ment will con­tinue to re­tain its stake in the com­pany post any sec­ondary sale of shares by in­vestors,” he said. Gour and cer­tain mem­bers of the se­nior man­age­ment team col­lec­tively own a 20% stake in the com­pany.

Air Works claims to be the largest in­de­pen­dent flight main­te­nance and re­pair or­gan­i­sa­tion (MRO) in In­dia. It pro­vides main­te­nance ser­vices to car­ri­ers such as SpiceJet and Vis­tara at its fa­cil­ity in Ho­sur, on the out­skirts of Ben­galuru. GMR is the only other ser­vice provider that main­tains air­craft for third par­ties. Air In­dia and Jet Air­ways have in-house air­craft main­te­nance arms.

Air Works also pro­vides tran­sit checks at 14 air­ports for mul­ti­ple for­eign car­ri­ers. Founded in 1951 by PS Menon and BG Menon, the com­pany has grown through ac­qui­si­tions since Gour’s ap­point­ment as the head of its busi­ness in 2010. It ac­quired a con­trol­ling stake in Air Liv­ery, the largest air­craft refin­ish­ing com­pany in Europe in 2010, along with its paint­ing fa­cil­ity in Toulouse, France, lo­cated next to Air­bus’ man­u­fac­tur­ing site, as part of its pur­chase of Aero Tech­nique Es­pace four years ago.

Air Works recorded rev­enues of .₹ 650 crore for the year ended March 2016.

Ex­perts see big scope for third­party flight MROs in the coun­try where air traf­fic is ris­ing rapidly. “Over 90% of air­craft main­te­nance work is presently out­sourced by In­dian car­ri­ers due to oner­ous taxes in In­dia. Once lo­cal reg­u­la­tions ease, do­mes­tic ser­vice providers will see their busi­ness grow sub­stan­tially,” said Am­ber Dubey, head of aero­space and de­fence at KPMG.

Ac­cord­ing to es­ti­mates com­piled by the In­ter­na­tional Air Trans­port As­so­ci­a­tion (IATA), In­dia will be among the five fastest grow­ing civil avi­a­tion mar­kets in terms of pas­sen­ger traf­fic ad­di­tions by 2034.

Air Works, mean­while, is in the process of sign­ing a con­tract with Rolls Royce for main­te­nance and re­pairs of he­li­copters fit­ted with the lat­ter’s en­gines.

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