Abu Dhabi Airways merges with Abu Dhabi Airways

DUBAI, Oct 17 (Reuters) – Abu Dhabi sovereign wealth fund ADQ said on Monday it had offered to buy a controlling stake in Abu Dhabi Airways. (ADAVIATION.AD) And combine the helicopter operator with ADQ stakes in Etihad Engineering, AMMROC and GAL to create a “globally competitive aviation business” with assets of about AED 9.4 billion ($2.56 billion).

ADA said in a stock exchange filing that it will hold a board meeting on Wednesday to discuss the proposal.

ADQ said that under the transaction, ADQ will own approximately 59% of ADA’s entire issued share capital.

ADQAbu Dhabi’s smallest major state-owned fund, started in 2018 as a holding company for government assets and has been consolidating its portfolio, privatizing some assets and making strategic acquisitions to create a “national champion”.

ADQ said it would combine ADA with its 100% stake in Etihad Engineering and Advanced Military Maintenance Repair and Overhaul Centre (AMMROC) and its 50% stake in GAL, the aviation services company it controls in Abu Dhabi.

According to IGG’s website, GAL is 50 percent owned by the International Golden Group, a leading supplier to the UAE military.

It is unclear how ADQ plans to merge an entity it does not have a controlling stake in.

ADQ, which is 30% owned by Mubadala, another Abu Dhabi wealth fund, will issue convertible instruments to ADQ that will be converted into approximately 652 million ADA shares upon closing, ADQ said in a statement.

ADQ said the converted ADA shares were priced at AED6.14 per share, implying a stock valuation of around AED2.7 billion.

ADQ’s chief executive Mohamed al-Suwaidi said in a statement that the deal would “further position Abu Dhabi as a world-leading centre of excellence for aviation” and create an industry “champion”.

ADQ said that if ADA’s board approves the deal, it would need approval from shareholders and regulators.

(1 USD = 3.6727 UAE Dirham)

Reporting by Yusuf Saba; Editing by Susan Fenton

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