Shareholders of Abu Dhabi Aviation have approved issuing mandatory convertible bonds worth AED4,003,280,000 Emirati Dirhams (USD1.09 billion) to ADQ Aviation and Aerospace Services LLC after that entity sold MRO, engineering, and logistics businesses to Abu Dhabi Aviation. The transaction initiates a merger which will see ADQ Aviation take a controlling stake in Abu Dhabi Aviation.
The approval was given at an April 27 shareholders meeting in Abu Dhabi. The transaction sees ADQ Aviation transfer 100% of the issued share capital of Advanced Military Maintenance Repair and Overhaul Centre LLC (AMMROC), 100% of the issued share capital of Etihad Airways Engineering LLC (EYE), and 50% of the issued share capital of Global Aerospace Logistics LLC (GAL) to Abu Dhabi Aviation.
The bonds will convert into 652,000,000 Abu Dhabi Aviation shares, given a conversion ratio of 6.14 for each new share. Abu Dhabi Aviation says that ratio was the result of financial and technical valuations. Each new share will be treated as fully paid and valued at AED1 (USD0.27) and increase the issued share capital of Abu Dhabi Aviation to AED1,096,787,200 (USD298.7 million).
The transaction effectively merges Abu Dhabi Aviation into ADQ Aviation. Completing the deal would result in ADQ Aviation owning 59.44% of the combined group's share capital. ADQ Aviation is a wholly-owned subsidiary of the Abu Dhabi Developmental Holding Company PJSC sovereign wealth fund. Abu Dhabi Aviation owns and operates 58 aircraft, including 51 rotary-wing and seven fixed-wing aircraft. Its activities span aeromedical work, offshore support for the oil industry, search and rescue, VVIP flights, general aviation, and third party maintenance support. The Abu Dhabi government has a 30% interest in Abu Dhabi Aviation.
The merger between Abu Dhabi Aviation and ADQ Aviation is expected to finalise this quarter with the new shares also due to list on the Abu Dhabi Stock Exchange (ADX) before June 30.
