Saturday 20 October 2018

O'Brien sells stake in aircraft leasing firm Aergo

Denis O'Brien
Denis O'Brien
John Mulligan

John Mulligan

Aergo Capital, the aircraft leasing business co-founded by billionaire businessman Denis O'Brien, has been bought by US investment firm CarVal.

The American company didn't reveal the purchase price, but the deal sees Mr O'Brien completely exit Aergo. He owned 80pc of the company, which was founded in 1999.

Aergo's chief executive, Fred Browne, owned the remaining stake, which he has also sold to CarVal.

However, he is reinvesting in Aergo under its new ownership, taking a 10pc stake and will remain with the business.

Dublin-headquartered Aergo leases a fleet of aircraft to carriers around the world including Dublin-based Cityjet. It also manages some aircraft on behalf of their owners.

Last year, the company generated pre-tax profits of almost $2.3m (€1.7m), on revenues of $44.9m (€35.5m).

Aergo sold its South African leasing subsidiary Safair to Dublin-based ASL Aviation in 2010, having bought it in 2008.

"Aergo has been a very profitable business and I believe this transaction will see Fred Browne and the management team take it to further success in the aviation industry," said Mr O'Brien.

Justin Bradburn, managing director at CarVal, said the acquisition offers a "compelling and strategic solution" for the company.

CarVal already has an interest in more than 30 aircraft. Acquiring Aergo gives it a vehicle to better manage the assets it already owns and an opportunity to further grow that side of its aviation business.

Mr Browne said the deal with CarVal will enable Aergo to expand its business model into newer, more modern aircraft.

"We look forward to working with CarVal Investors to build a strategic partnership that will build on the firm's strength and track record and Aergo's proven expertise in managing mid-life aircraft," he said.

Since its inception, Aergo has traded more than 150 aircraft with a gross value of over $1bn (€791m).

Ireland is one of the world's leading centres for the aircraft leasing business.

Mr O'Brien, who owns a near 30pc stake in Independent News & Media, made his fortune from telecoms.

Irish Independent

Business Newsletter

Read the leading stories from the world of Business.

Also in Business