Formal partial takeover offer of Airwork could be tabled by next week

Wednesday 26th October 2016

Airwork Holdings, the Auckland-based aircraft services business, has told investors a formal partial takeover offer could be made as early as next week, provided conditions are satisfied or waived.

Earlier this month Chinese company Zhejiang Rifa Holding Group (RIFA) announced it had entered a takeover lock-up deed with the major shareholders at $5.40 per share.

Under the pre-bid deed, RIFA has agreed to make a conditional partial takeover offer for 75 percent of Airwork’s ordinary shares. Interests associated with non-executive director Hugh Jones hold 53.79 percent the shares on issue, so the deal can proceed regardless of whether any other shareholders accept because RIFA is seeking a minimum of 50.1 percent.

The company has appointed Grant Samuel to prepare an independent appraisal of the offer for shareholders.

According to a transcript of chairman Mike Daniel's address to shareholders at today's AGM, Daniel said "The making of an offer by RIFA is subject to satisfaction or waiver of a number of pre-conditions...subject to the timing of satisfaction or waiver of the conditions, the offer could be made as soon as Nov 3."

Any deal will still require the go-ahead from the Overseas Investment Office, the administrative committee of the Shanghai Pilot Free Trade Zone and what Airwork term the approval of "various aviation regulators."

Daniel also told investors that he expected net profit after tax of more than $25 million for the year to the end of June 2017, up from the $24.6 million reported for the 2016 financial year.

Addressing the business's performance notes published to the NZX show Chief Executive Chris Hart warned that, "our helicopter business does continue to face a number of challenges, particularly in the resource sector."

Airwork benefited in the 2016 financial year from a number of short-term, highly profitable helicopter contracts but Hart said that "with the continued downturn in the resources sector, these contracts are becoming harder to secure." The company is targeting tourism operators and the emergency services to diversify the business.

Airwork floated in late 2013, selling shares in an initial public offering at $2.60 apiece. They are currently trading at $4.80 and have gained 26 percent this year.

BusinessDesk.co.nz

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