In a filing with Bursa Malaysia on Wednesday, the company said its unit APFT Services Sdn Bhd entered into a conditional agreement to buy the shares from Datuk Seri Teh Chee Teong, whose equity interest would decrease to 20%.
US-incorporated Aviation AI, presently dormant, owns a Gulfstream G-1159A private jet that it plans to operate from Redland Terminal Centre & Hangar Complex at Sultan Abdul Aziz Airport, Selangor.
APFT said Aviation AI acquired the aircraft in 2016 and had subsequently invested RM2.5mil to upgrade it for private jet charter. It expects to acquire more aircraft as and when the business grows.
The other shareholders of AAI are Redland Aviation Services Sdn Bhd executive chairman and chief executive officer Datuk Ismail Hassan (30%) and timber product maker NWP Holdings Bhd (30% stake to be acquired from Ismail). Ismail was formerly a corporate director of the Economic Planning Unit in Selangor.
On the rationale for the new venture, APFT said the main contributor to the group’s revenue currently was flight education and training but, due to various challenges, the group had been continuously making losses.
“Notwithstanding the above, the group is in the midst of conducting a review of its overall operations to identify and restructure business functions to improve its earnings,” the company said.
“Pursuant to the proposed acquisition, APFT Services will hold 20% equity interest in AAI. As such, the management has decided to capitalise on this opportunity to expand its fleet through the proposed acquisition.”
APFT said the target market for the private charter comprised public and private corporate customers such as government agencies and commercial entities.
APFT executive director Edwin Silvester Das recently told StarBiz that the company planned to expand into air charter services and sell non-profitable businesses in order to turn around.
The group has 25 single and twin-engine aircraft that can seat four to eight people, and three helicopters that could be used for the air charter services into the region.
Meanwhile, based of NWP’s announcement to the stock exchange, Aviation AI had inked into an aircraft management agreement with Ismail’s Redland Aviation Services in October last year to provide it with aircraft maintenance services, flight scheduling services, flight support services, management services and operating services.
The agreement is for a term of five years and may be extended for a period of three years if mutually agreed on by both parties.