Stobart buys out remaining stake in aircraft lessor
Published 19/11/2016 | 02:30
Transport group Stobart is buying the 33pc it doesn't already own in the firm that leases planes to its Stobart Air subsidiary for €14.7m from Aer Lingus, the British company said yesterday.
Stobart said the move will give it 100pc control of leasing firm Propius and that it expects the deal to close before the end of the year. According to a filing last year, Propius owns eight ATR 72-600 aircraft used by Stobart Air.
The deal is the latest sign that Stobart is edging closer to completing a multi-facted transaction to sell Stobart Air to rival CityJet.
Stobart Air operates the Aer Lingus Regional service on a franchise basis for Aer Lingus. CityJet and Stobart declined to comment on the reports yesterday. Stobart said it was acquiring full ownership of Propius because it is a profitable aircraft leasing company that generates cash.
UK-based transport group Stobart owns 45pc of Dublin-based Stobart Air, and has agreed to acquire between 36pc and all of Invesco's 40pc stake in Stobart Air, as well as buying full control of Propius. The latest changes pave the way for Stobart Air to be sold to CityJet. The deal was first revealed by the Irish Independent earlier this year.
UK broker Cenkos owns 10pc of Stobart Air. It has been expected that CityJet will ultimately pay as much €15m for Stobart Air, and that the Propius leasing arm will be valued at between €60m and €65m for the purposes of the takeover by Dublin-based CityJet.
UK-based aviation financing group Falko, which is supported by affiliates of funds managed by Fortress Investment Group, is closely linked to the takeover by CityJet. Propius, Based in the Cayman Islands, was established in 2013 as a joint venture between Aer Lingus, Invesco and Stobart Air.
After yesterday's deal Stobart will have bought out all of its former partners.
Propius owns the Stobart Air aircraft and leases them on a long term basis to the airline.
Following today's deal, Stobart Group will own 100pc of Propius and up to 85pc of Stobart Air.
The transactions are expected to complete next month. Aer Lingus will for now retain its 33pc stake in Propius.
Stobart Air reported earlier this year that it made a €500,000 profit after tax last year. It had gross assets of €20.9m at that date.
It's the first time in years that the airline made a profit.
The sale by Aer Lingus of its Propius stake is the latest indication that management there have given the nod to the longer term plan to merge City Jet and Stobart Air.
It's important because Stobart's continued operation of the Aer Lingus franchise paves the way for what in effect will be a new European regional airline force.