07 Oct 2016 | 07.15 am
Avolon Set To Double In Size
Irish leasing giant will have 910 aircraft
07 Oct 2016 | 07.15 am
Aircraft leasing company Avolon Holdings is to acquire the aircraft leasing component of US firm CIT Group, which will double the size of its aircraft leasing business to an owned, managed and committed fleet of 910 aircraft valued at over $43 billion. The deal is subject to closing conditions and regulatory approvals and is expected to close in the first quarter of 2017.
Based in Ireland, with offices in the United States, Dubai, Singapore, Hong Kong and Shanghai, Avolon provides aircraft leasing and lease management services. It is a wholly-owned, indirect subsidiary of Bohai Capital Holding Co, a Chinese public company listed on the Shenzhen Stock Exchange.
If the deal gains approval, it will double the size of Avolon’s business and create the world’s third largest aircraft leasing platform. Avolon says its expansion plans aim to make it the biggest aircraft leasing company, and that taking on CIT’s pipeline of 282 orders for the latest high-tech aircraft will enable this.
The company outlined what it sees as the highlights of the acquisition:
- Avolon to acquire the CIT Group aircraft leasing business including 334 owned and managed aircraft and 133 aircraft on order or committed.
- Avolon will acquire total assets of $11.1 billion and associated liabilities. Avolon will pay $10 billion for $9.4 billion of net asset value, a premium of 6.7%.
- The combined owned, managed and committed fleet will include 910 aircraft valued at over $43 billion.
- Combined orders and commitments of 349 aircraft includes 195 Airbus aircraft, 59 Boeing 737 MAX aircraft and 28 Boeing 787 aircraft.
- The in-service fleet of 511 aircraft has an average aircraft age of 4.6 years, the youngest fleet among the world’s top three aircraft leasing companies, with an average remaining lease term of 6.7 years.
Avolon CEO Dómhnal Slattery (pictured) said: “From a standing start, we will have built Avolon into a leading global player in six years. We are delighted to announce an agreement to acquire the CIT aircraft leasing platform. It is a strong business with an excellent reputation in the market.
“While this transaction is strategically compelling and will double the scale of Avolon, it is not the summit of our ambition. Avolon has a strong brand, a best-in-class fleet, a proven business model and a long-term strategic shareholder committed to the sector. We look forward to continuing to drive the disciplined growth of the business in the years ahead.”
Bohai CEO Chris Jin said: “Our vision at Bohai is to build each of our transportation finance businesses into global leaders. Our decision to acquire Avolon in 2015 was a key step towards that objective. The Avolon team has already delivered remarkable growth in building a new platform into a leading industry franchise.
“They are now taking a further exciting step towards our collective goal to become a true global leader in transport finance. We are confident in the prospects for the enlarged business which has a strong, proven team and the operating disciplines to drive sustainable performance.”