Asia Aviation Public Company Limited (SET: AAV) has announced that the Board of Directors of the company has approved the entering into the aircraft sale and leaseback transaction and the aircraft lease transaction between Thai AirAsia Co., Ltd. (TAA), a subsidiary engaged in the main business of AAV, and an aircraft leasing company.
The Board of Directors approved that TAA enter into the aircraft sale and leaseback transaction with Sky Aero Management Limited or the person designated by Sky Aero Management Limited (Sky). The transaction comprises the sale of 4 aircraft and the lease of 4 of the sold aircraft back in order to further use the leasing aircraft in the Company’s business operation.
The asset disposal transaction by selling the aircraft to Sky. The total value of consideration of This transaction is USD 101.25 million or approximately THB 3,338.56 million. The asset acquisition transaction by leasing the aircraft from Sky. The value of this transaction is approximately USD 79.19 million or approximately THB 2,610.99 million.
The Board of Directors approved that TAA enter into the aircraft sale and leaseback transaction with Avolon Aerospace Leasing Limited or the person designated by Avolon Aerospace Leasing Limited (Avolon).
The transaction comprises the sale of 3 aircraft and the lease of 3 of the sold aircraft back in order to further use the leasing aircraft in the Company’s business operation. The asset disposal transaction by selling the aircraft to Avolon. The total value of consideration of this transaction is USD 67.30 million or approximately THB 2,219.02 million.
The asset acquisition transaction by leasing the aircraft from Avolon. The value of this transaction is approximately USD 43.42 million or approximately THB 1,431.61 million.
Moreover, the Board of Directors approved that TAA enter into the aircraft lease transaction with Avolon by leasing 1 aircraft which is the asset acquisition by such transaction which will have value approximately USD 8.88 million or approximately THB 292.79 million.
The entering into of the aircraft sale and leaseback transaction is part of TAA’s fleet management strategy, to manage any risks related to changes in the future value of the aircraft due to any changes in technology which cause newer models of aircraft to be more efficient. TAA will enter into the Sale Transaction during the period in which the value of and demand for the aircraft are still high.
After the repayment of the loans which were secured from the financial institutions for the finance lease of the Selling Aircraft, TAA will have net cash of approximately THB 1,689.93 million which can be used as working capital. However, TAA will be subject to higher maintenance expenses, with recognition arising from a change in the nature of transactions, from that of finance lease to operating lease. Such change may affect the business operations of AAV for a period of time.
