KOTAM IN TALKS WITH AIRASIA
S. Korean group is preferred bidder for Asia Aviation Capital, say sources
ALITTLE-KNOWN South Korean group is in advanced talks to acquire a stake in AirAsia Bhd’s aircraft leasing unit, according to three people familiar with the matter.
The people said a deal would value AirAsia’s fully-owned unit, Asia Aviation Capital, at roughly US$900 million (RM3.98 billion).
Privately-owned Korea Transportation Asset Management (Kotam) has been picked as the preferred bidder, the people said, with one adding that state lender Korea Development Bank (KDB) was tapped to provide funding, though it was not clear whether the bank had agreed to back the deal.
Kotam is part of Kukje Maritime Investment Corp, known as KMarin, which was founded in 2005 and has a fleet of 46 ships, according to its website.
A successful deal would mark South Korea’s biggest move into the US$256 billion global aircraft leasing sector.
Kotam and AirAsia are negotiating final terms of the purchase of a majority stake in the leasing unit, one of the sources said. AirAsia has sought buyers for its subsidiary since last year, and had said it aimed to close a sale early this year.
A deal with Kotam could still fall through, and two sources said AirAsia had not closed the door to a deal with a Chinese bidder.
South Korean insurers, asset managers and securities firms are attracted to aviation finance as aircraft leases offer fixed returns and are often seen as relatively safe transactions.
It was reported in December that AirAsia had received strong interest from North Asian firms, besides many Chinese companies.
One of the sources said AirAsia was becoming concerned about Chinese buyers’ ability to close a deal due to China’s recent measures to tighten controls on money moving out of the country.
AirAsia, which has pending orders for about 400 Airbus aircraft, has been allocating planes to its leasing subsidiary and has been seeking to diversify the unit’s customer base beyond AirAsia’s affiliates.