KKR exits Malaysia's Weststar Aviation after 10-year hold

Weststar Group, the parent company of WAS, which is controlled by Malaysian billionaire Syed Azman Syed Ibrahim, has bought back the 21% interest to take full ownership, according to a statement cited by local media. KKR issued no statement on its website, although Henry Kravis, the firm’s co-executive chairman, was quoted in the Weststar statement.

KKR paid MYR 642m (then USD 200m) for 40% of WAS in 2013. This was its first private equity investment in Malaysia and the debut deal for its second pan-regional fund, which closed on USD 6bn earlier the same year. KKR is now deploying its USD 15bn fourth Asian fund.

WAS 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. When KKR invested, the company operated eight helicopters and three private jets.

WAS now claims to be the largest helicopter operator in Malaysia and Southeast Asia by fleet size with 34 aircraft. It continues to serve blue-chip oil and gas industry customers and has also moved into areas such as public energy and sustainable energy. The company’s geographic footprint encompasses Africa, Vietnam and the Middle East, in addition to Southeast Asia.

An IPO has been mooted on several occasions over the past decade, most recently in 2022. Mergermarket, AVCJ’s sister title, reported in 2020 that KKR had already sold half its stake to Weststar Group and was looking to offload the remainder to a third party.

The original investment was a proxy for growth in Southeast Asia's oil and gas industry. This was one of numerous deals that followed broadly the same thesis – KKR, The Carlyle Group, and The Blackstone Group set up platforms intended to develop oil and gas assets in the region or to provide services to others involved in such activities. Others backed a variety of standalone support players.

Ultimately, these investments were caught out by the subsequent commodities downturn. Most of the platform structures were abandoned with little if any capital put to work. Meanwhile, investments in businesses such as support vessel operator Miclyn Express Offshore and pipeline repairs specialist Kreuz – both by HPEF Private Equity – are understood to have been restructured.

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• Topics
• Southeast Asia
• Buyback
• Support services
• KKR
• Commodities
• energy
• Transportation