Saturday 24 March 2018

Fly Leasing to raise $150m for expansion through share offering

Colm Barrington: CEO of firm
Colm Barrington: CEO of firm
John Mulligan

John Mulligan

Dublin-based and New York-listed aircraft firm Fly Leasing, which is headed by Aer Lingus chairman Colm Barrington, expects to reap the proceeds today of a $150m (€114m) share placing – just months after Mr Barrington said the firm wouldn't need to raise cash this year to finance its expansion plans.

Fly Leasing has had a fundraising prospectus filed with the US Securities & Exchange Commission for some time that would enable it to raise as much as $500m from investors.

Last week, it confirmed that it would raise $150m through a share issue, sending its shares lower in trading on the New York Stock Exchange. Fly Leasing said it intended to use the proceeds for general corporate purposes, including buying aircraft. It currently has 103 aircraft on its books. Its clients include Virgin Atlantic, British Airways and Qantas.

Mr Barrington, who is chief executive of Fly Leasing, had said back in January that he expected the company to be sufficiently funded to see out its plans for 2013.

The company, which acquires aircraft through the secondary market and via sale and leaseback by airlines, secured a $250m acquisition facility back in November.

In January, it received further funding after private equity firm Onex acquired a 50pc interest in BBAM, the world's third largest manager of commercial aircraft.

BBAM acts as manager of Fly Leasing and servicer of the aircraft portfolio. Fly Leasing had a 15pc stake in BBAM but sold it as part of the Onex deal.

Earlier this month, Fly Leasing boosted the size of its aircraft acquisition facility from $250m to $450m and extended the facility's availability for an additional two years. The interest margin on the facility fell by 0.5 percentage points and two new lenders came on board.

The new shares being offered have been priced at $14 apiece. Morgan Stanley, Citigroup, Deutsche Bank Securities and RBC Capital Markets are acting as book-running managers for the offering. Fly Leasing said that certain directors of the firm and of BBAM have agreed to buy a total of 142,857 shares.

Although Fly Leasing is registered in Bermuda, it's resident in Ireland for tax purposes.

Last year the company generated operating lease revenue of $376.4m and total revenue of $432.7m. It posted pre-tax net income of $51.5m compared to $5.3m a year earlier.

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