Threatened with closure for its poor safety record, troubled Adam Air has sold a 50% share of its business to PT Bhakti Investama (Bhakti) - a large Indonesian corporation with holdings in the mass media and telecommunications controlled by the PT Bimantara Citra group.
While both Bhakti and Adam Air are remaining mum on the cash value of the sale of 50% of the company, an Adam spokesman did confirm that the "new cash" would allow the Airline to move ahead with plans to acquire 60 new aircraft. Adam Air plans to add 10 new aircraft in 2007 comprised of Boeing 737-300 and Airbus A320 equipment.
Adam Air, currently operates 22 airplanes.
Part of Adam Air's medium-term plans include acquiring an armada of sufficient size to take advantage of more liberalized commercial air policies expected to come into effect in ASEAN in 2010.
According to the Indonesian-language Bisnis Indonesia, Bhakti financed its buy-in to Adam Air via a US$100 million loan from Lehman Brothers. Plans are for the loans to eventually be converted in to tradable obligations bearing a 6% rate of interest which will converted into shares when Bhaklti's shares achieve a price of Rp. 1,650 per share (approximately US$0.18). Following the announcement of the buy-in Bhakti's share price closed at Rp. 1,100 per share, up slightly from the previous day's close of Rp. 1,090.
To fund the rapid expansion plans of Adam Air the owners of the airline plan to take the airline public in the near future on one of the regional bourses.
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