AirAsia and SATS agree to form ground-han­dling tie-up

The Star Malaysia - StarBiz - - News -

PE­TAL­ING JAYA: AirAsia Bhd and SATS Ltd have agreed to a ground-han­dling part­ner­ship in Malaysia and Sin­ga­pore to ex­pand their op­er­a­tions in South-East Asia.

Un­der the terms of the part­ner­ship, SATS will ac­quire a 50% in­ter­est in AirAsia’s unit, Ground Team Red Hold­ings Sdn Bhd (GTRH), in ex­change for SATS’ 80% stake in the new ground-han­dling en­tity, SATS Ground Ser­vices Sin­ga­pore Pte Ltd (SGSS), in Changi Air­port, Sin­ga­pore, and an ag­gre­gate cash con­sid­er­a­tion of S$119.3mil (RM372.2mil).

GTRH will be re­named SATS Ground Team Red Hold­ings Sdn Bhd, which would be the 50:50 joint in­vest­ment ve­hi­cle of AirAsia and SATS that would own stakes in both its Malaysia and Sin­ga­pore sub­sidiaries, Ground Team Red Sdn Bhd (GTR) and SGSS, re­spec­tively.

AirAsia would ef­fec­tively own 51% of GTR and 40% of SGSS, while SATS would ef­fec­tively own 49% of GTR and 60% of SGSS.

“Both com­pa­nies would also be re­spon­si­ble for grow­ing the ground-han­dling busi­ness in their re­spec­tive mar­kets and would ex­plore ex­pan­sion into In­done­sia, Thai­land and the Philip­pines in the near fu­ture,” AirAsia and SATS said in a joint state­ment.

In its fil­ings with Bursa Malaysia yes­ter­day, AirAsia said its part­ner­ship with SATS would fos­ter greater ef­fi­ciency and cost sav­ings to its ground-han­dling op­er­a­tions.

“It is an­tic­i­pated that these trans­ac­tions will re­sult in AirAsia re­al­is­ing a gain on dis­posal of RM365.7mil in the fourth quar­ter of 2017.

“The cash bal­ance of AirAsia will in­crease by RM372.2mil fol­low­ing the sale,” the low-cost car­rier said.

AirAsia group chief ex­ec­u­tive of­fi­cer Tan Sri Tony Fer­nan­des said: “We be­lieve this joint ven­ture will al­low AirAsia to un­lock sig­nif­i­cant value and grow.”

AirAsia ex­pects its part­ner­ship with SATS to sup­port its growth to­wards 500 air­craft and 150 mil­lion pas­sen­gers by 2027.

SATS of Sin­ga­pore is a re­gional leader in gate­way ser­vices and food so­lu­tions ser­vices. The com­pany also owns a 49% stake in the largest flight caterer in Malaysia, Brahim’s SATS In­vest­ment Hold­ings Sdn Bhd.

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