AirAsia could sell leasing arm after strategic review

Reuters
AirAsia planes prepare for take off at Don Mueang International Airport in Bangkok, Thailand, June 29, 2016. REUTERS/Chaiwat Subprasom/File Photo

KUALA LUMPUR (Reuters) - Asia's biggest budget airline AirAsia Bhd is considering options for its leasing arm, including a potential sale, the company said on Friday.

Reuters had reported this month that AirAsia was looking to sell a majority stake in its Asia Aviation Capital (AAC) leasing operation, or possibly the entire business, which the carrier values at 4.1 billion ringgit ($1.02 billion).

AirAsia aims to attract an equity investor for the business by the end of the year, Reuters reported on Thursday, citing a presentation to analysts.

The 4.1 billion ringgit valuation of AAC represents about half of AirAsia's total market capitalisation.

"Management is carrying out a strategic review of AAC, including the potential divestment of all or a substantial portion of its equity interest in AAC or its business or assets," AirAsia said in a statement to the Malaysia stock market.

AirAsia plans to tap potential suitors including the leasing units of China's HNA Group, China Merchants Bank and Accipiter Holdings, the aviation leasing company backed by Hong Kong billionaire Li Ka-shing, sources have said.

(Reporting by A. Ananthalakshmi; Editing by David Goodman)