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Abu Dhabi Airlines (ADA) is seeking shareholder approval to issue AED4 billion ($1.09 billion) of convertible bonds to ADQ Aviation and Aerospace Services LLC in a deal that would see a subsidiary of wealth fund ADQ hold nearly 60 % of the shares in the company.
In October last year, ADQ Aviation offered to transfer its entire stake in Etihad Engineering and Advanced Military Repair and Overhaul Center and its 50% stake in Global Aerospace Logistics LLC to Abu Dhabi Airways.
In a regulatory filing to ADX on Friday, ADA said it would issue to ADQ Aviation an obligatory convertible instrument of around AED4 billion, which will be sold at AED6.14 per new ordinary share immediately upon completion of the transaction. Price converted to new ADA shares.
Upon completion of the transaction, which is expected to take place in the second quarter of 2023, ADQ Aviation will hold 59.45% of the entire issued share capital of ADA.
The ADA said the deal would be beneficial due to cost synergies from shared services and overall scale, reduced turnaround times from consolidation of OEM relationships, and the potential for localization of maintenance activities.
(Reporting by Brinda Darasha; Editing by Daniel Luiz)
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