Loading
28-May-2015 10:01 AM

AAR Corp completes tender offer and provides restructuring update

AAR Corp completed (26-May-2015) a modified Dutch auction style tender offer to purchase shares of its common stock for an aggregate cash purchase price of USD135 million. The company expects to retire 4.2 million shares at USD31.90 per share, leaving a fully diluted share count of 34.9 million shares as it enters 1QFY2016. AAR chairman and CEO David P Storch said the company has completed the first phase of a three-phase plan to "streamline and focus the company on aviation and expeditionary services and to return capital to shareholders". Other details:

  • Second phase restructuring will use the proceeds from the sale to pay down debt, reducing interest expenses by USD25 million p/a, as well as to return capital to shareholders by buying shares through the tender offer;
  • AAR will be divesting its 'Precision Machining' business and selling other assets that are no longer a part of its business strategy. These include certain aircraft and inventory no longer required by its airlift business, aircraft in its lease portfolio, as well as inventory in supply chain and MRO businesses that is excess to our needs or where AAR is exiting certain product lines;
  • Excluding the sale of Precision Machining, AAR expects to generate USD55-70 million in cash from these actions and incur USD55-70 million in charges in 4QFY2015;
  • AAR anticipates some asset sales will continue into 1QFY2016;
  • AAR has taken action to reduce corporate costs by approximately USD8 million p/a. [more - original PR]

AAR: "As we enter the third phase of building a best in class aviation and expeditionary services company we find ourselves in a strong financial position to build out our strategy as we have improved our leverage profile and our cash on hand plus unused capacity is in excess of USD500 million. We expect to invest opportunistically in expanding our service, supply chain and mission critical operational capabilities to expand our leadership positions." Chairman and CEO, David P Storch. Source: AAR Corp, 26-May-2015.

Want More News Like This?

CAPA Membership provides access to all news and analysis on the site, along with access to many areas of our comprehensive databases and toolsets.
Find Out More