Last checked at 18 Oct 2017 07:00
18th October 2017
Gama Aviation Plc (AIM: GMAA)("Gama Aviation" or the "Company")
Acquisition of 51% of Gama Group Mena FZC
Background
As part of the original Jet Set Equity Partners Limited (FZC) ("Jet Set") investment into Gama Aviation in 2008, Gama Aviation and Jet Set agreed to establish a start-up operation in the Middle East to provide Air and Ground services regionally. Jet Set is a consortium of local private equity investors comprising Growthgate Capital Corporation BSC (C) Bahrain, Crescent Investment LLC and Felix Tr. Co. LLC ("Felix") each of whom is currently a share holder of the Company. Under the terms of this original investment, a regional holding company for the Air and Ground divisions, Gama Group MENA FZC ("Gama MENA"), was formed with the Company holding a 49% equity interest and Jet Set owning the remaining 51%. Gama Group MENA FZC provides aircraft management and chartering through its subsidiary Gama Aviation FZE (the ME Air division) and aircraft maintenance and FBO services through its Gama Support Services FZE subsidiary (the ME Ground division).
Acquisition of Jet Set interest
Today Gama Aviation announces the acquisition of the 51% Jet Set interest in Gama MENA for a cash consideration of $5.1m. Following the acquisition, the Company will own 100% of Gama MENA.
Consistent with worldwide regulations governing the foreign ownership of air carriers nationally, Gama MENA has divested a 51% equity interest in Gama Aviation FZE, its ME Air Division, to Felix for a nominal consideration. Under an agreement between shareholders, Gama MENA will retain management and operational control of the ME Air Division and will be entitled to 80% of the dividends paid by Gama Aviation FZE. In addition, Gama MENA will receive a branding fee of 0.5% of the revenues of Gama Aviation FZE.
Benefits and Financial effects of the transaction
In the year ended 31 December 2016, Gama MENA achieved revenues of $24.7m and profit before tax of $0.2m. Gama Aviation believes that there are significant growth opportunities in the Middle East generally. In particular, new compliance requirements in Saudi Arabia and the development of the Business Aviation Centre in Sharjah, UAE, present attractive aircraft management opportunities which are also expected to drive growth in maintenance and FBO services. Gama Aviation has therefore decided to increase its economic interest and management control in Gama MENA at a time when the business is well placed to grow and develop this market opportunity.
This transaction between Gama Aviation and Jet Set is considered to be a related party transaction for the purposes of AIM Rule 13, and accordingly the Board, having consulted with Jefferies International, the Company's nominated adviser, considers the terms of the transaction to be fair and reasonable insofar as the Company's shareholders are concerned.
This announcement contains inside information.
End
Gama Aviation Plc +44 1252 553 010Marwan Khalek, Chief Executive
Kevin Godley, Finance Director
Camarco +44 (0) 20 3757 4992
Ginny Pulbrook
Geoffrey Pelham-Lane
Jefferies International +44 207 029 8000 (Nominated Advisor & Broker)
Simon Hardy
Will Soutar
Gama Aviation - Notes to Editors
Gama Aviation (GMAA) is a global business aviation services company that specialises in providing support for individuals, corporations and government agencies. Gama Aviation is now one of the top three global players in a highly fragmented market, with a fleet of over 250 aircraft. Gama operates across Europe, the US, the Middle East, Asia and Africa.