AirAsiaX sells 20% stake

AirAsia X has executed an agreement to place a 20% equity interest to the Manara Consortium, based in Bahrain, and ORIX Corporation from Japan, for an aggregate cash consideration of approximately RM250 million.

Under the terms of the agreement, Manara and ORIX will each receive approximately 16.7 million newly issued common shares of AirAsia X, or 10% of AirAsia X’s equity. After giving effect to the issuance, Aero Ventures Sdn Bhd and the Virgin Group will hold a 48% and 16% stake in AirAsia X respectively. AirAsia Bhd will maintain a 16% stake through its holdings of Redeemable Convertible Preference Shares. All regulatory and shareholder approvals have been received for the transaction. Each new strategic investor will nominate a representative to the AirAsia X Board of Directors.

The Manara Consortium comprises of four leading Saudi investment groups who together with 3i Group plc have sponsored the Manara Infrastructure Fund to invest in infrastructure projects, including airlines and airports, in Islamic countries. Manara Consortium’s investment in AirAsia X will later be transferred to the Manara Infrastructure Fund. ORIX, along with its subsidiary ORIX Aviation, a leading aircraft owner and lessor in Ireland with a portfolio of over 130 aircraft, will undertake its investment through its investment vehicle in Ireland ORIX is also a shareholder in Skymark Airlines, Japan’s leading low cost carrier.

The share placement represents an important phase of AirAsia X’s growth plans with proceeds raised from the transaction allowing the airline to fund aircraft orders already placed with Airbus and further fleet expansion.

“We are very pleased with the outcome of this transaction and look forward to working together with Manara and ORIX as long-term strategic partners as AirAsia X continues to grow. We believe that AirAsia X is now well-placed to further enhance its reach to destinations in the Middle East and North Asia, and to continue to revolutionize the long-haul travel market by providing everyday low fares. This investment will allow AirAsia X to expand its fleet with new generation aircraft and further strengthen Malaysia’s leading position as ASEAN’s low cost carrier hub,” said Azran Osman-Rani, CEO of AirAsia X.

Datuk Seri Kalimullah Hassan, Chairman of AirAsia X added, “There were a bevy of financial investors eager to invest in AirAsia X but we selected Manara and ORIX due to the strategic nature of their investment and their ability to bring much more than just financial clout to the table. It is important that AirAsia X select partners which allow the company to continue to keep costs low and grow rapidly. Manara will allow AirAsia X greater access to the fast-growing Middle East region whilst Orix will contribute its significant expertise in aviation finance and leasing.”

Credit Suisse acted as the exclusive financial advisor and Logan Sabapathy & Co. acted as the legal advisor to AirAsia X in this transaction.

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