QUALITY INVESTMENT: Weststar Aviation set for listing at end-2014 or early 2015
WESTSTAR Group has received US$200 million from selling a stake in its aviation arm to United States private equity firm KKR & Co.
The group, controlled by Tan Sri Syed Azman Syed Ibrahim, stands to make more from its planned listing of the aviation unit, Weststar Aviation Services Sdn Bhd.
Weststar yesterday sealed a deal with New York-based KKR to sell a "substantial minority" Weststar Aviation stake for US$200 million (RM636 million).
Syed Azman, who is the group's managing director, said Weststar Aviation should be listed on Bursa Malaysia by end-2014 or early 2015.
"KKR is a private equity company and when they invest in a private limited company, they would want to cash out when it is floated. So yes, we will undertake an IPO (initial public offering) for Weststar Aviation between end-2014 and early 2015," he said.
Syed Azman stressed that the alliance with KKR is more of a knowledge-sharing than an investment.
"KKR has a stake in United Kingdom-based Avincis Group, which has 500 helicopters under management and that's the expertise and knowledge we want to tap," he said.
Weststar Aviation provides helicopter charter services for oil and gas majors such as Petroliam Nasional Bhd (Petronas) and ExxonMobil Corporation.
"We're anticipating robust demand (in the oil and gas sector) within the next five years and we are preparing to meet that demand.
"During the last three years, we've been buying 10 helicopters a year and now we have 35 helicopters, with 10 more expected this year."
The partnership had been in the works since the beginning of the year and Syed Azman anticipates more collaboration in the future.
"I had a meeting with the founder of KKR, Henry Kravis, in New York last month, and he is also looking at the possibility of investing in other (Weststar) businesses."
KKR's investment in Weststar Aviation is its first in Malaysia, although it had invested US$1.5 billion in companies in Southeast Asia since 2005.
"For KKR, it is the quality of the investment that is most important," said its regional head of Southeast Asia, Ming Lu.