AirAsia shares down on news of special dividend

AirAsia Malaysia share price fell 1.52% at mid day after it plans to use the bulk of the cash proceeds from the sale of its aircraft leasing operations Asia Aviation Capital Ltd to pay out a special dividend to shareholders and settle bank borrowings to improve its financial leverage.

At 12pm today, AAB’s share price stood at RM4.53 with 13.49 million shares changing hands.

AAB will sell Asia Aviation Capital Ltd for US$1.18 billion to BBAM Limited Partnership (BBAM) managed entities.

Under the terms of the agreements, FLY Leasing Limited (FLY), Incline B Aviation Limited Partnership (Incline), Nomura Babcock and Brown (NBB) will acquire a portfolio of 84 aircraft and 14 engines of which 79 Aircraft and 14 engines will be leased back to AirAsia and its affiliates.

FLY and Incline have also entered into agreements to acquire 48 aircraft to be delivered to AAB and an option to acquire a further 50 aircraft to be delivered.