Thursday 23 February 2017

Equity groups to pay more than €370m for joint control of Avolon

Financier Slattery will stay on as CEO in aircraft leasing firm

John Mulligan

John Mulligan

Financier Domhnal Slattery is poised to sell a joint controlling stake in his new Irish aircraft leasing business, Avolon, to major private equity groups including CVC and Cinven, for well in excess of $500m (€370m), the Irish Independent understands.

The precise scale of the investment in Avolon, where Mr Slattery is and will remain chief executive, isn't yet known, but is likely to be revealed within weeks once the European Commission, as expected, gives the green light for the cash injection into Avolon that will result in a change in its majority ownership. The amount of money to be pumped into the new leasing business via debt and equity could even approach $1bn. Cinven only considers projects where it can invest a minimum of €100m.

A spokesman for Avolon confirmed that the group is in discussion "with a number of potential investors", but declined to comment further. When contacted yesterday, Mr Slattery also declined to comment on the deal.

The latest venture by Mr Slattery, the Clare-born founder of Dublin-based Claret Capital, is also being backed by US-based Oak Hill Capital Partners. CVC, Cinven and Oak Hill will acquire joint control of Avolon, pending the successful outcome of the commission decision, which is expected by the middle of next month.

Since early this year, Mr Slattery has been lining up potentially interested parties in Avolon, having originally hired Swiss investment bank UBS to raise nearly $800m in debt funding to kick-start the company.

Jump

Oak Hill is thought to have committed $250m (€184m). The managing partner of Oak Hill Partners, Denis Nayden, will be Avolon's chairman.

Mr Slattery also persuaded a number of key executives at the Dublin-based unit of Royal Bank of Scotland's aviation capital unit to jump ship to Avolon.

He established International Aviation Management after working for Guinness Peat Aviation and sold the business to RBS in 2001 for about €45m. He then formed private equity group Claret Capital, in which Senator Feargal Quinn's family has a stake.

Another planned venture, air taxi service JetBird, has so far failed to get off the ground. Mr Slattery had hoped to launch the private jet service in Europe, but an original aircraft order with Brazilian aircraft manufacturer Embraer was cancelled earlier this year. JetBird says it's negotiating a new purchase agreement with Embraer and hoping to raise fresh capital.

Irish Independent

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