A Boeing 737-800 of Kulula
Photo by: Duane Daws/Creamer Media
South African private-sector airline group Comair announced on Friday, via a Stock Exchange News Service release at the Johannesburg Stock Exchange, that it was acquiring the “shares and claims” of Star Air Maintenance and Star Air Cargo. The deal involves paying the sellers R75-million, plus profit share payments.
“Comair has acquired the assets to extend its diversification strategy into the leasing of aircraft, while also providing Comair with the expertise and systems to establish a base for heavy maintenance checks on its fleet of [Boeing] 737-800 aircraft,” stated the release. Star Air Maintenance provides maintenance for Star Air Cargo’s own fleet as well as for third party operators.
Star Air Cargo is actually an aircraft leasing company, specialising in short and medium term leasing of both passenger and cargo aircraft to operators in Africa. It possesses a Part 121 domestic and international aircraft operating certificate.
The profit share payments, which form part of the deal, are capped at R250-million. As for the R75-million, this will be paid in three tranches. The first tranche will be paid five business days after the fulfilment of all the conditions precedent for the transaction (the Completion Date) – this will amount to R30-million. The second tranche, of R22.5-million, will be paid on the first anniversary of the Completion Date. The third tranche, also of R22.5-million, will be payable on the second anniversary of the Completion Date (subject to certain conditions relating to the financial performance of the acquisitions).
The net assets of the two entities being bought by Comair totalled R52.6-million on February 28, 2018 (that being the date of the last audited financial statements). Their audited profits after tax for the year ending February 28, 2018, came to R23-million.
Comair operates both the British Airways brand in South Africa and the Kulula low cost airline. Its fleet is composed entirely of different versions of the Boeing 737 airliner. Star Air Cargo’s much smaller fleet is, according to its website, also made up only of 737s.