China's Rifa reaches 59% acceptances of Airwork in partial takeover

Rifa entered a takeover lock-up deed with major shareholders at $5.40 per share as of October.

Zhejiang Rifa Holding Group said it has acceptances for 59% of Airwork Holdings in its partial takeover of the Auckland-based aircraft services business.

Earlier this month, the Chinese group set out its bid for the partial takeover, telling shareholders it would seek to grow Airwork's presence in emerging markets such as in Asia and Latin America.

Rifa entered a takeover lock-up deed with major shareholders at $5.40 per share as of October. Interests associated with non-executive director Hugh Jones hold 54% the shares on issue, so the deal could have proceeded regardless of whether any other shareholders accept because Rifa sought a minimum of 50.1%. It has offered to buy up to 75% of the shares at $5.40, valuing the target company at $271 million.

This morning, Rifa said the level of acceptances had increased to 59.007%.

In its offer to shareholders published to the NZX this month, Rifa said it would maintain its listing on the NZX and would support the existing business strategy, maintain the headquarters in New Zealand and retain key personnel. It would also "retain and respect the organisational culture, history and achievements of Airwork."

It argued there are growth opportunities from it being a major shareholder, including "growing Airwork's helicopter leasing presence in China through a potential dispatch of existing Airwork helicopters and acquisition of new helicopters." Rifa would also seek to expand its maintenance and repair work through gaining certification in emerging markets.

The offer shows that Rifa established Air Xiya, an aviation business in China in 2014. Before this, it had specialised in textile machinery and electronic precision machinery. Rifa is aiming to build Air Xiya to include 30 helicopters and fixed wing aircraft in the next five years, with its growth accelerated by acquisitions such as Airwork.

The deal remains reliant on achieving regulatory approval from both the Overseas Investment Office and aviation regulators.

Airwork shares were unchanged at $4.85, and have gained 24% this year. They were trading at $4.42 before the takeover offer was announced.