PETALING JAYA: In just three days, the share price of AirAsia Bhd rose 36 sen or 13.8% on talks that the airline has received the proceeds from the sale of its aircraft leasing unit.
The share price rose from RM2.60 a share three days ago to close yesterday at RM2.96.
“The proceeds from the aircraft leasing unit could be driving the rise in share price as investors are expecting a windfall in a form of a special dividend,’’ said an industry source.
“We expect the dividend payout to be anything from 75 sen to 91 sen a share,’’ he added.
The figure could not be verified but the airline company did announce to Bursa Malaysia in March this year that about RM2.615bil (based on the exchange rate of RM3.9985:US$1) or 74.4% of the proceeds “shall be distributed as a special dividend with the quantum to be determined” after the monies have been received.
In March, AirAsia announced the disposal of its leasing unit, Asia Aviation Capital Ltd (AAC) to BBAM Ltd Partnership for US$1.18bil (RM4.619bil), and at that point, analysts were speculating a windfall for shareholders in the region of 60 sen to 70 sen a share.
The sale to BBAM, the world’s third-largest aircraft lessor, will see AirAsia raking in proceeds of RM3.8bil.
The deal involves the sale of 182 current and future aircraft with engines.
“Now that the funds are in, the management will likely meet in the coming days to decide on the quantum of special dividend payout the market is expecting.
“The announcement on the quantum is likely to be announced when AirAsia announces its third quarter financial results planned for Nov 22,’’ the executive said.
“Our target price incorporates an expected dividend payment amounting to 91 sen per share. Of this, 84 sen per share is expected to come from the sale of 84 aircraft and 14 engines to BBAM LLC,’’ CGSCIMB Research said in a note recently.
It added that “since the US dollar has strengthened to RM4.17 (from RM3.9985 when the sale was announced), we lift our potential dividend expectations from the BBAM transaction from 75 sen to 84 sen.’’
Based on AirAsia’s latest update on the BBAM transaction as at end- October, all of the 84 aircraft and 14 engines have been successfully sold to BBAM except for five remaining aircraft which will be sold in November.
CGSCIMB said it expects a further 7 sen a share in dividend to come from the US$60mil in disposal proceeds from the sale of the 25% stake of AAE Travel to Expedia as announced in August this year.