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Ontic disposal completion and proposed return of capital

BBA Aviation ("BBA" or "the Group"), a market-leading provider of global aviation support services, is pleased to announce it has completed the disposal of Ontic to CVC Fund Vll having met all regulatory and financial conditions.

The previously announced disposal price of $1,365 million is subject to certain price adjustments including cash and debt-like items at closing, resulting in effective proceeds of $1,321 million. Out of these proceeds, BBA intends to repay $250 million of bank debt, has paid $32 million of USPP make-whole costs, and has agreed to contribute $39 million (being the $ equivalent of £30 million) to the BBA Income and Protection Plan, in consideration of the Pension Scheme Trustee releasing the security which it held over certain of Ontic's assets. There will also be further payments with regard to tax and customary transaction fees.

Taking account of these deployments, BBA is planning to return $835 million to shareholders, an amount which is near to the top end of the guided range when the transaction was announced on 30 July 2019. The reduction in net debt is intended to ensure a strong balance sheet is maintained and to position the Group near the lower end of the stated targeted range of net debt to underlying adjusted EBITDA of 2.5 to 3.0 times on a covenant basis at 31 December 2019.

The Board has approved a return to shareholders of 80.71 cents per existing ordinary share as a special dividend, equivalent to approximately 21% of the ordinary share price at close of business on 31 October 2019. The special dividend will be paid on 13 December 2019 to shareholders who are on the register at the close of business on 22 November 2019. In order to maintain the comparability of the Group's share price and per-share metrics before and after the special dividend, the Group plans to undertake a share consolidation. The share consolidation will replace every 5 existing ordinary shares with 4 new ordinary shares.

Following completion of the Ontic disposal and given the on-going process to dispose of the ERO business, it is expected that the Group will from that point comprise predominantly the market-leading Signature business. This will enable enhanced focus on Signature, which the Board believes to be a significant source of future shareholder value creation. The Board has therefore elected to change the Company's name to "Signature Aviation plc" which will better align it with the Company's most significant brand in its core market. In addition, it will create a stronger and clearer connection of the brand to shareholders and other stakeholders.

It is intended that the change of name will come into effect on or around 25 November 2019. The intended effective date of the change of name has been chosen to align as closely as possible with the start of trading of the new ordinary shares, post the share consolidation.

The Company's ticker will change to "SIG" and the Company's current ISIN and SEDOL will change due to the share consolidation and the issuance of the new ordinary shares. The Company's shares will remain listed on the London Stock Exchange and the Company will remain a member of the FTSE 250. The Company's website will change to www.signatureaviation.com. All of these changes will be effective as soon as practically possible after the change of name has been implemented.

Signature's free cash generative characteristics should allow it to sustain a progressive dividend policy and the potential for ongoing returns of capital, surplus to the investment requirements of the Signature business, while maintaining a strong balance sheet within the target leverage range on a covenant basis. The progressive dividend policy is based on a dividend per share basis and the directors intend to continue following this policy once the proposed share consolidation has been completed, with the dividend per share for the new ordinary shares being progressive relative to the dividend per share for the existing ordinary shares. The Board expects the next payment under this policy to be the final dividend in respect of the 2019 financial year. The policy applies to the annual ordinary dividend and excludes the special dividend of 80.71 cents per share.

The share consolidation is subject to the approval of the Company's shareholders and accordingly the Company has today posted to shareholders a Notice of General Meeting and explanatory circular (the "Circular") to shareholders regarding the share consolidation and related resolutions which will be put to shareholders at the General Meeting.

Press release issued by Ontic on November 1, 2019

 

 Contact details from our directory:
Ontic Electric Motors, Engine Accessories, Valves, Solenoid Valves, Rotary Actuators, Linear Actuators, Mechanical Actuators, Tachometer Generators, Accumulators, Starter Generators, Oil Coolers, Fans, Blowers, AC/DC Generators, Aircraft Landing Gear, Anti-Skid Brakes & Systems, Ball Screw Assemblies, Bearings, Centrifugal Pumps, Constant Speed Drives, Cooling Systems, Directional Control Valves, Electrical Actuators, Electromechanical Actuators, Engine Controls, Engine Heat Exchangers, Engine Synchronisers, Explosion/Flame Suppression Systems, Fire & Smoke Detectors, Fluid & Hydraulic Drives, Fuel Control Systems, Fuel Filters, Fuel Flow Rate Indicators, Fuel Management Systems, Fuel Probes, Fuel Pumps, Fuel Quantity Indicators, Gearboxes, Gears & Assemblies, Helicopter Landing Gear, High Pressure Actuators, Hydraulic & Pneumatic Cylinders, Hydraulic & Pneumatic Motors, Hydraulic Actuators, Hydraulic Equipment, Hydraulic Pumps, Inertial Components & Systems, Market Analysis, Oxygen & Air Regulating Equipment, Oxygen Equipment Cylinders, Oxygen Systems, Piston Pumps, Portable Oxygen Systems, Reservoirs, Rotary Pumps, Storm-Warning Radar, Tachometers, Terrain Awareness and Warning Systems

 

 Related directory sectors:
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Power Transmission
Oxygen Systems & Equipment
Navigation Aids (Airborne)
Mechanical Components
Marketing
Landing Assemblies
Indicators and Instruments
Fuel Systems
Fluid Power
Environmental Systems
Engine Components
Electrical Power Systems
Bearings
Actuation

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