Business Irish

Sunday 21 January 2018

Aircraft lessor Avolon 'could be worth $2bn in stock market floatation'

Domhnal Slattery, chief executive officer of Avolon
Domhnal Slattery, chief executive officer of Avolon
John Mulligan

John Mulligan

Dublin-based aircraft-leasing firm Avolon, which was established by Clare entrepreneur Domhnal Slattery, could be worth as much as $2bn (€1.4bn) if it floats on the stockmarket, according to an analysis by Bloomberg.

Last month, it emerged that Avolon had hired JP Morgan Chase and Morgan Stanley to explore a possible stockmarket listing or a sale of the business. Avolon is owned by private-equity firms including Oak Hill Capital Partners, Cinven and CVC Capital Partners.

A listing would see it make a stockmarket debut in the United States. The Government of Singapore Investment Corporation is also an investor in the lessor.

Avolon has the youngest fleet of any global aircraft leasing firm and has 47 customers around the world. At the end of the first quarter of this year, it had 115 aircraft in service with clients and a total committed fleet, which includes orders, of 202 aircraft.

An analysis by Bloomberg reckons Avolon could be valued at between $1.5bn and $2bn based on generic fleet values, a typical capital structure and market valuations. Another Ireland-based aircraft-leasing firm, AWAS, could be valued at $3bn (€2.1bn), according to Bloomberg.

AWAS and Avolon's narrow-body fleets are 30pc to 35pc weighted to Asia, the most of any region, according to the Bloomberg analysis.

"Customer exposures are critical in Asia, with exposure to fragmented markets such as southeast Asia the biggest risk," it added.

"AWAS' largest customers are from Japan and China, indicating revenue stability, while Avolon's fleet presents greater challenges, with 50pc exposure to developing India and Indonesia."

Bloomberg added that fleet size and diversification, customer diversification and order books influenced the overall valuation, which could limit Avolon's and AWAS' price.

Avolon has raised a total of $7.5bn in capital since it was launched by Mr Slattery in 2010. The entrepreneur sold his International Aviation Management firm to RBS in 2001 for €36m.

Irish Independent

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