BBA Aviation and John Menzies complete $202m refuelling deal

BBA Aviation, a FTSE 250 aviation services company, has completed the sale of its refuelling business ASIG to Scottish distribution firm John Menzies for $202m.

Of the $202m, about $160m will be received after tax, professional transaction fees, and other costs, which will be used to reduce BBA's borrowings.

After adjusting for costs, foreign exchange reserves write-off, and other charges, the deal will realise a $15m loss on disposal for BBA, which as part of the deal will provide transitional services to Menzies for six months.

BBA is looking to reduce the $20m support costs previously allocated to ASIG by at least half during the 12 months following transition with a one-off cost of around $5m.

Manzies chief executive Forsyth Black said it was a "truly transformational deal" for the company: "Whilst ground handling is at the core of our business ASIG brings exciting new product lines to the group giving us great opportunities to further strengthen the aviation business."

BBA boss Simon Pryce said the divestment was part of a "continuing emphasis on delivering long-term, sustainable value for shareholders" and focused BBA's focus on providing business and general aviation and legacy support services.

ASIG's earnings, before interest, tax, depreciation and amortisation (EBITDA) for calendar 2015 were $31.9m and its underlying and statutory pre-tax was $20.3m and $17.9m, while the value of its gross assets at the end of last June was $255.6m.