Sumitomo leads race to buy RBS Aviation Capital
Published 13/01/2012 | 05:00
Japan's second-biggest bank, Sumitomo Mitsui, is now understood to be the favoured buyer for Royal Bank of Scotland's Dublin-based aviation leasing business.
The Japanese bank has reportedly offered over $7bn (€5.5bn) for the operation.
RBS Aviation Capital was originally put up for sale in 2009, but that process was stalled in 2010. RBS is seeking to sell the business in order to repay the UK government for its 2008 bailout. The British taxpayer owns 83pc of RBS.
Last week it was reported that just two bidders were left in the race to acquire the aviation leasing unit -- Sumitomo Mitsui and China Development Bank.
However, news agency Bloomberg said yesterday that the Japanese institution is now the preferred bidder for the subsidiary. It is believed that RBS has concerns about whether China Development Bank could get government approval for a purchase as quickly as RBS would like.
Accounts for the RBS unit show it generated revenue of $655m in 2010 and a pre-tax profit of $204m. RBS Aviation Capital was spawned from International Aviation Management, a company established by Clare-born entrepreneur Domhnal Slattery.
Mr Slattery sold International Aviation Management to RBS in 2001 for an estimated £30m (€36m). He eventually went on to establish aircraft leasing firm Avolon, which is also based in Dublin. A number of key executives from the RBS leasing division were poached by Mr Slattery.
Avolon has proved a highly successful venture for Mr Slattery, and has raised more than $4bn in debt and equity since it was founded in 2010. It has almost 100 aircraft on its books.