Abu Dhabi Aviation (BAR, Abu Dhabi International) has received an offer from ADQ Aviation and Aerospace Services LLC (ADQ Aviation) to take a controlling stake in the company. The deal would see ADA's operations merge with the ADQ Aviation-controlled Advanced Military Maintenance Repair and Overhaul Centre LLC (AMMROC), Etihad Airways Engineering LLC, and aviation services Global Aerospace Logistics businesses.
ADQ Aviation is a wholly-owned subsidiary of the Abu Dhabi Developmental Holding Company PJSC sovereign wealth fund and owns 100% of AMMROC and Etihad Airways Engineering LLC. It also has a 50% stake in Global Aerospace Logistics. The Abu Dhabi-based defence and security company, the International Golden Group (IGG), is the other Global Aerospace shareholder.
ADQ Aviation proposes transferring its shareholdings to ADA in exchange for a note convertible into 652 million ordinary ADA shares. The proposed conversion rate is AED6.14 dirhams (USD1.67) per share, representing a 23% premium on ADA's share price when the markets closed on October 14. Completing the deal would result in ADQ Aviation owning 59.44% of the combined group's share capital and the offer values ADA's total stock equity at AED2,730 million (USD645.2 million).
ADA is the Middle East's biggest helicopter operator. The business is 30% owned by the Government of the Emirate of Abu Dhabi, with the remaining 70% in private shareholder hands. According to the ADX, ADA flies a fleet of AW139s, 412 and 212 Bell Helicopters, Eurocopter EC135s, and De Havilland Aircraft of Canada Dash 8s primarily for oil and gas charter contracts.
ADA's board notes the deal remains subject to government, regulatory, and stockholder approval. The board has a meeting scheduled on October 19 to discuss the offer and they say that a shareholder's meeting will be held sometime in 1Q 2023 to vote on the merger offer, adding that there is no certainty the transaction will occur.
