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BBA Aviation set to make a loss on $202m refueller business disposal

Multinational aviation firm BBA Aviation has announced it has agreed to dispose of its refuelling business, Aircraft Service International Group (ASIG), to Scottish firm John Menzies plc.

Announced to the London Stock Exchange this morning, the $202m cash deal, which is dependent on the approval of Menzies’ shareholders, will be funded through the raising of additional debt and equity.

ASIG operates in over 80 airports around the world providing ground services such as fuelling, cabin cleaning, baggage maintenance and deicing, employing around 8,000 aviation professionals making it one of the biggest independent aviation services firms in the world.

Simon Pryce, BBA Aviation Group Chief Executive said the deal was part of the London-headquartered organisation’s continued emphasis on ‘delivering long-term, sustained value for shareholders’ and that there had been significant demand from interested parties.

He added that the sale of ASIG to Menzies would create a ‘larger’ and more ‘broad based’ global supplier of ground aviation services, dovetailing with Menzies’ aviation business which has been providing ramp and cargo handling services since 1995.

As part of the deal, BBA have agreed to provide six month transitional services to the Scottish business once the transaction has been completed.

The multinational aviation firm admitted that the costs incurred for its transitional efforts along with foreign exchange reserve write-offs and other charges would mean that they would eventually stand to make a $15m loss on the transaction.

Pryce commented: “This disposal further enhances BBA Aviation’s focus as a high quality, strongly cash generative market leader in the provision of business and general aviation and legacy support services.”

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