SATS and AirAsia have entered into a share swap and share sale deal, to gain an interest in each other's ground handling units.
Under the deal, SATS will acquire a 50% stake in AirAsia's Ground Team Red Holdings (GTRH) for SUSD 119.3 million (USD 87.6 million).In exchange, GTRH will get an 80% stake in SATS Ground Services Singapore (SGS Singapore).
Thereafter, GTRH will be renamed SATS Ground Team Red Holdings (SATS GTRH). This will be a 50:50 joint investment vehicle of AirAsia and SATS, that will hold stakes in both Ground Team Red Malaysia (GTR Malaysia) and SGS Singapore.
Following the transactions, AirAsia will effectively own 51% of GTR Malaysia and 40% of SGS Singapore, and SATS the remaining shares.
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"Both companies will also be responsible for growing the ground handling business in their respective markets and will explore expansion into Indonesia, thePhilippinesand Thailand in the near future," says SATS and AirAsia.
"This partnership will also support the rapid growth of AirAsia towards 500 aircraft and 150 million passengers by 2027 by combining AirAsia's expertise in providing quick and low-cost turnarounds with industry best practices and innovative technology developed by SATS for passenger and ramp handling."
AirAsia says the transactions, expected to complete by end-November, will see itrealisea disposal gain of MYR365.7 million (USD 86.4 million) in the fourth quarter.
The new partnership will give SATS, which already owns a 49% stake in the largest flight caterer in Malaysia, Brahim's SATS Investment Holdings, access to the Malaysian ground handling market. SGS Singapore was established to service passengers at Changi Airport's new Terminal 4.
