Global aviation services company Menzies has acquired a majority stake in AJAS Limited, a privately owned provider of ground and cargo handling services in operation for 82 years.
The terms of the transaction between Menzies and AJAS owner Caricom Airlines Services (Holding) Limited were not disclosed, but AJAS Chairman Howard Mitchell described the deal as substantial.
Companies Office of Jamaica records do not reflect the shareholders of the cargo handler, but Mitchell says he is the majority owner, while minority stakes are held by Mark Kerr Jarrett through Barnett Estate, Dr Richard Harrison and his wife Judith Harrison, Dr Christopher Tufton, and Barry Byne.
The stake being acquired by Menzies Aviation was not disclosed. However, Mitchell said the deal would see all shareholders giving up some of their holdings to the aviation company, but the precise proportions may change by the time the transaction is finalised at the end of February.
The chairman had previously indicated that AJAS would be approaching the equities market for financing in late 2019, but those plans were scuppered by the coronavirus pandemic.
“COVID-19 intervened, closed down the country, hit the stock market launch, and also hit us with the virtual closure of the airport and no traffic for us,” Mitchell said.
But now that the aviation industry is experiencing recovery from the pandemic, it was seen as a good time to revisit the company’s growth plans, leading to the deal with Menzies, he added.
“Going to the market was an option, but that only gives you capital. But the technology, the systems, and the global modernisation of the aviation sector is what we’d still have to get. This provides us with a solution to that,” Mitchell said regarding the Menzies deal, which gives AJAS access to training, branding, and modern technology deployed in 256 airports.
AJAS handles around 90 per cent of the cargo and 52 per cent of the passenger traffic that flow through the Norman Manley and Sangster international airports, the chairman said.
Cargo throughput for financial year ended September 30, 2022, was approximately 20.1 million kilogrammes.
“If we believe that the sky’s the limit for Jamaica’s logistics hub and the aviation sector and we see that the new airport management is about to embark on modernisation and development of the airports, then this is timed to work hand in hand with that,” said Mitchell.
In a release, the company said the transaction is expected to close in a matter of weeks once all regulatory approvals are in place. The company’s rebranding to Menzies AJAS and integration into the Menzies global network, which spans six continents, will commence this month.
The current AJAS management team will remain in place.
AJAS Limited was formed in 1941 as All Jamaica Aviation Services to serve as airport handling and general sales agents for KLM’s first scheduled flight into Jamaica. It was operated by the former Lascelles DeMercado Group.
Caricom Airlines Services acquired AJAS from Lascelles in 2013. The cargo handler now has a workforce of nearly 600 staff.
neville.graham@gleanerjm.com
