Dubai: ADX-listed Abu Dhabi Aviation is considering an offer made by ADQ Aviation to combine the latter's shareholding in three aviation services entities into its fold. The combined group would have assets of about Dh9.4 billion ($2.6 billion) with a portfolio that includes aircrafts, MRO centers and hangars. The three entities include:
• Advanced Military Maintenance Repair and Overhaul Centre. (In full)
• Etihad Airways Engineering. (In full)
• Global Aerospace Logistics (ADQ Aviation holds a 50 per cent stake in GAL.)
These three entities are billed as 'perimeter assets' and, if a deal goes through, would be integrated into ADA. “The key terms of ADQ Aviation’s offer are to transfer the 'perimeter assets' to ADA’ through a convertible instrument issued by ADA," ADA said in a statement. "This will translate into around 652 million ordinary shares in the capital of ADA on closing the transaction."
The transaction, once done, is 'expected to create a globally competitive aviation business headquartered in Abu Dhabi to position the emirate as a world-leading hub for aviation MRO services, logistics, supply chain and advanced engineering capabilities', ADQ said.
The fixed conversion price at which the convertible instrument would change into shares in ADA would be Dh6.14 a share. This would work out to a 23 per cent premium to ADA’s closing share price on October 14.
“The offer price implies an equity value of approximately Dh2.73 billion.”
In a statement, ADA said: “The Board of ADA will meet to review the offer by ADQ Aviation before making any recommendation to shareholders.” If an agreement is reached, ADA will call a general assembly in Q1-2023.
According to Mohamed Hassan Alsuwaidi, Managing Director and CEO of ADQ, “The proposed transaction will further position Abu Dhabi as a world-leading center of aviation excellence, combining the strengths of each asset to form a global MRO and aviation services champion to capitalize on growth opportunities in the aviation industry.
"The proposed combination will provide a framework to investing in the future development of an advanced aviation ecosystem that supports the sustainable transformation of Abu Dhabi and the UAE’s economy for the long-term.”