Asia's richest man eyes Dublin firm in possible $5bn deal
Published 02/08/2014 | 02:30
The richest man in Asia is believed to be lining up a bid for about 100 aircraft owned by Dublin aircraft leasing firm Awas.
Li Ka Shing could spend as much as $5bn (€3.8bn) on the aircraft, which have been put up for sale by Awas as it seeks to break up its portfolio.
Awas is owned by private equity firm Terra Firma. The company is just one of numerous aircraft leasing businesses in Ireland, which has become a global centre for the industry.
This will not be the first deal Mr Li has done involving an Irish company.
Earlier this year his telecoms giant Hutchison Whampoa, which owns the 3 brand, bought O2 Ireland for some €850m.
Awas plans to break up its fleet of about 280 planes and sell about 100 newer aircraft.
The fleet covers nearly all of the best-known passenger jet liners flying today. It's a mix of Boeing and Airbus planes and includes the likes of 747s and A340s. The company also owns a number of cargo aircraft.
The planes are leased to more than 100 operators in 50 countries around the world.
Apart from its Dublin office, Awas also has sales outlets in Miami, New York and Singapore.
Its assets are valued at about $11bn (€8.2bn) and are expected to increase to as much as $17bn (€12.7bn) in 2016, said chief executive Ray Sisson in May.
Terra Firma bought Awas from Morgan Stanley in 2006 for $2.5bn and later merged it with Pegasus Aviation, which it took over for $5.2bn in 2007.
However the company is believed to have begun exploring a sale or initial public offering earlier this year amid rumblings that Terra Firma were looking for a way out.
"There may be a move to exit by our shareholder in one form or another, it's in the analysis phase now," Mr Sisson said. "You could sell the company, or you could IPO it.
"Or you could make two leasing companies out of it."
Mr Li, whose Cheung Kong Holdings this week reported a 59pc increase in first-half profit, said the company will boost investments in the infrastructure sector.
If he does buy the fleet, the $5bn deal would be Mr Li's biggest since 2010, when his Cheung Kong Infrastructure bought part of a French power company.
Chinese lessors have been focused on the domestic market since the regulator first allowed banks to start aircraft leasing in 2007.
Hong Kong Aviation Capital, the lessor whose shareholders include China's HNA Group, ordered 70 Airbus planes worth $7.7bn (€5.7bn) last month.
(Additional reporting by Bloomberg)