Monday 17 December 2018

Goshawk Aviation boss coy on equity value as lessor eyes $1bn of deals

Goshawk CEO Ruth Kelly
Goshawk CEO Ruth Kelly
John Mulligan

John Mulligan

Dublin-based aircraft leasing firm Goshawk Aviation plans to continue raising about $1bn (€800m) a year in debt to fund almost the same value in jet purchases, according to CEO Ruth Kelly.

In an interview with the Irish Independent, the aviation boss would not be drawn on whether a stock market flotation of Goshawk - owned by Hong Kong investors - might be on the cards.

"There are pros and cons to listing. It's much easier to operate within a private environment," said Ms Kelly.

Goshawk is owned by 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-tun, and is a major shareholder in NWS.

Goshawk has committed portfolio of 114 aircraft valued at about $5.5bn (€4.4bn), mostly young, single-aisle Airbus A320s and Boeing 737s - workhorses of the global aviation fleet - but also some other jet types.

Ms Kelly said that NWS has previously made public comments about potentially listing Goshawk on the stock market.

She pointed out that even if such a listing was ever to happen, it would be done to spur Goshawk's growth rather than facilitate an exit by its investors.

She said that regulations around issues such as making disclosures, and the timing of the release of financial statements are "complicating factors" of a stock market listing.

"The benefits of listing are around the access to capital," she added.

However, Ms Kelly added that four-year-old Goshawk now has about 60 different lenders from all over the world, and has raised about $5bn of debt in that time.

She declined to speculate as to what the equity valuation of Goshawk Aviation might be. Transactions in 2016 which saw NWS and CTFE each increase their stakes by 10pc to 50pc each, did not provide a useful tool for estimating the current valuation, she said. NWS paid just over $88m for its additional equity stake in Goshawk at that time.

"The valuation of aircraft leasing companies is a very hot topic," Ms Kelly said. "There's lots of debate about whether valuations should be asset-based or PE (price-to-earnings)-based. Goshawk's valuation will be market-driven should we ever choose to ask the market."

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