Yesterday, Malaysia Airports (AIRPORT) announced that they are divesting their 10% stake in Delhi International Airport Private Limited (DIAL) for a total consideration of USD79.0m orRM292.6m.
We were not entirely surprised with the disposal of its 10% stake in DIAL, as management had mentioned about potentially divesting its overseas investments 2 – 3 years ago.
We are positive with the disposal as we believe itwould allow AIRPORT to have more focus on Sabiha Gocken International Airport’s operationsin the future.
The major proportion of the sale proceeds ofRM292.6m will be utilised for the repayment of borrowings (92.4%), while the remaining utilised for working capital (7.4%) and alsofees/expenses (0.2%) for the proposed disposal. Post repayment of borrowings and fees related tothe disposal, AIRPORT is expected to book anone-off gain of RM21.7m and we do not expect any special dividends from this particular disposal.
Moving forward, we remain cautious on AIRPORT’s outlook mainly due to its high operating costs since the inception of KLIA2, coupled with management’s conservative passenger traffic forecast of 85.8m pax for theentire 2015 due to air travel mishaps in 2014. Furthermore, the total passenger traffic of 16.7m registered for the period from Jan-Feb was lower than expected, as it only makes up 15.3% of our full-year passenger traffic estimates of 109.3m.
Source: Kenanga Research - 25 Mar 2015
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