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Dublin-based jet lessor SMBC to buy rival Goshawk


Aircraft lessor Goshawk is headed by chief executive Ruth Kelly

Aircraft lessor Goshawk is headed by chief executive Ruth Kelly

Aircraft lessor Goshawk is headed by chief executive Ruth Kelly

DUBLIN-BASED aircraft lessor SMBC Aviation Capital is set to buy rival Goshawk, also based in the capital, in a major deal that intensifies global consolidation in the sector after AerCap finalised its $25bn acquisition of Gecas last month.

SMBC Aviation Capital is headed by Peter Barrett, while Goshawk’s chief executive is Ruth Kelly.

The deal will significantly lift SMBC’s rankings in the sector, where both firms are already among the world’s top 10 biggest aircraft lessors.

News of the planned acquisition was first revealed today by industry news publication Airfinance Journal.

At the end of its last financial year, Goshawk had $7.3bn in aircraft assets and a long-term order book for 40 jets. At the end of March this year, SMBC had total assets of just under $16bn.

SMBC is owned by a consortium of Japan's Sumitomo Mitsui Banking Corporation, Sumitomo Mitsui Finance and Leasing, and Sumitomo Corporation.

Goshawk is owned by Hong Kong’s Chow Tai Fook Enterprises (CTFE) and stock market-listed NWS. CTFE is privately owned by the family of the late Hong Kong billionaire Cheng Yu-tung, and is a major shareholder in NWS.

Airfinance Journal reported that in 2019 Goshawk had hired HSBC and Citi to explore options including a possible sale after its two shareholders decided to exit the business.

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SMBC Aviation Capital, which is among the world’s top five biggest lessors, has a fleet of 734 owned, managed and on-order aircraft.

Goshawk, which was founded in 2013, has a fleet of 222 owned, managed and on-order jets. They’re leased to 61 airlines in 31 countries.

Both SMBC and Goshawk declined to comment when contacted about the planned takeover.

In the financial year to the end of last March, SMBC generated a $15.2m pre-tax profit. Its lease revenue in the period was $1.1bn, virtually unchanged on the previous year’s figure.

The profit in the last financial year compared to a $364m pre-tax profit in the previous financial year, before the full effect of the pandemic had been felt. It ended the most recent financial year with $4.9bn in available liquidity.

In its last financial year, SMBC also signed with Boeing to buy an additional 14 737 Max jets, which are due to be delivered between the end of this year and into 2022.

Goshawk’s Ruth Kelly told the Irish Independent during the summer that the lessor was well positioned to benefit from an anticipated recovery in travel, as well as being a possible consolidator in the sector.

“Should suitable M&A opportunities arise, that would be on the radar,” she said at the time.

Goshawk’s total lease revenue in 2020 was $763m. Net of provisioning for trade receivables, that represented 96pc of 2019’s total.

The company was catapulted into the top 10 league of aircraft lessors in 2018 when it acquired Dublin-based Sky Leasing, which had 51 aircraft in its fleet.

Ireland is the world’s biggest international centre for the world’s aircraft leasing sector.

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