KKR invests $200m in Malaysia’s Weststar Aviation
KKR has completed its first investment in Malaysia, paying approximately MYR642 million ($200 million) for a substantial minority stake in Weststar Aviation Services (WAS). It is also the first investment from KKR Asian Fund II, a $6 billion vehicle that reached a final close in July.
The deal represents a proxy to the growth in Southeast Asia's oil and gas sector. WAS provides helicopter transportation services to the likes of Petronas Carigali, Exxonmobil, Total, Talisman, Schlumberger, Shell and Conoco Philips.
The company was founded in 2003, with a fleet comprising a single helicopter, to supply general aviation charter services. Five years later it entered the oil and gas space, securing a five-year contract to provide offshore transport services for Carigali Hess. Now WAS operates eight helicopters and three private jets, and plans to construct a new hanger at Sultan Abdul Aziz Shah airport in Subang to accommodate the larger fleet.
WAS is one of eight divisions of Weststar Group, a diversified regional operator with businesses covering automotives, aviation, construction, and defense and engineering.
"We believe trends in the oil and gas sector in Malaysia and the broader region are long-term positive, and we look forward to supporting the company in its ambitious growth and expansion plans," said Ming Lu, head of Southeast Asia at KKR.
KKR has previously invested in the offshore aviation sector through Avincis Group, which claims to be the world's leading provider of aerial services for mission-critical operations such as medical emergencies, civil protection, search and rescue, fire-fighting and energy support services.
Southeast Asia's energy sector has seen numerous private equity investments ranging from capital injections for companies that identify and extract resources to backing for ancillary services providers.
This is in part a play on the fact that Asia is growth long and resources short: the combination of urbanization, industrialization and sheer economic scale in China, India and Indonesia means these countries will account for the bulk of new energy demand in the next 20 years, and they are inclined to look for supplies on their doorstep.
For example, First Reserve backed KrisEnergy, a start-up oil and gas explorer with assets in Cambodia, Indonesia, Thailand and Vietnam. It went public in Singapore earlier this year, raising $213 million. On the services side, Headland Capital Partners and CHAMP Private Equity hold a majority stake in support vessel operator Miclyn Express Offshore.
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