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Investment in Air Works India boosts Elephant Capital

Elephant Capital’s net asset value rose by a penny over the six months to the end of February 2015 to reach 36p. Most of that increase can be attributed to a write up in the value of Air Works India (Engineering) Private Limited. Elephant Capital sold its last listed investment after the end of the period. The stake in Nitco fetched £160k. Global Cricket Ventures is the subject of a number of legal disputes and the value of this investment was written down from £470k to £380k.

Air Works is one of the leading independent providers of Aviation Maintenance, Repair and Overhaul (MRO) services in India, Aircraft Paint and Refinishing in Europe and Aircraft Management Services in Dubai. Founded in 1951, Air Works has successfully transformed itself from a family run business focused on providing maintenance services to business aircraft into a professionally managed organisation providing a full suite of services to customers across Aircraft Management, Business and General Aviation MRO, Aircraft Paint and Refinishing, Commercial Aviation MRO, Avionics and Parts Distribution. It is India’s largest and only EASA Certified Business Aviation MRO company. On a consolidated basis, Air Works had a profitable closing to its financial year FY2015 with revenue of approximately $105m and an EBITDA of around $12m. The revenue for FY2015 was lower than the previous year by circa 5% due to the impact on pricing and volumes of increased competition in the repainting market in Europe. However, the EBITDA on the consolidated basis has shown an improvement from 10% last year to circa 12% in FY2015 on account of improving operating efficiencies. Air Works completed a rights issue in April 2015 (Elephant Capital did not participate in the rights issue). The rights issue raised $7.72m at a pre-money valuation of $125m (the pre-money value at which Elephant Capital originally invested in May 2011 was $50m). Air Works has also negotiated circa $37m of debt funding from its banking partners. This capital will be used to repay some existing loans and the rest will be earmarked for funding the acquisition targets in the pipeline referred to below. They say Air Works has also been evaluating various acquisition opportunities to fuel the company’s growth via inorganic expansion and has identified targets in Aviation Auditing, Valuation, and Advisory services, and is in advanced stages of negotiating the deals.

ECAP : Investment in Air Works India boosts Elephant Capital

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