Saturday 24 February 2018

Slattery may sell $5.8bn Avolon early as next year

Exit through an IPO also being considered by aviation tycoon

Tycoon: Domhnal Slattery
Tycoon: Domhnal Slattery
Nick Webb

Nick Webb

Aviation tycoon Domhnal Slattery may try to sell his $5.8bn (€4.3bn) valued Avolon aircraft leasing giant as early as next year.

It is understood that Slattery is considering selling the company, returning cash to shareholders or exiting through an IPO over the next 24 months.

Dublin-headquartered Avo-lon was set up three years ago by Slattery and has been backed by Singapore's sovereign wealth fund GIC, as well as private equity giants Oak Hill Capital Partners, Cinven and CVC Capital Partners.

Avolon is planning to double its $5.8bn asset base over the next five year, Slattery told a recent conference. The firm has 105 jets on its books, with another 74 on order.

The airline leasing sector is becoming smoking hot for investors, with a spate of multi-billion dollar deals inked recently. RBS jettisoned its aviation leasing outfit to Japanese bank Sumimoto for $7.3bn last year. Mitsubishi UJF Lease & Finance splashed out $1.1bn to buy Oaktree's Jackson Square Aviation, with Babcock & Brown Aircraft Management also offloading a 50 per cent stake to Onex Corp for $165m last December.

International Lease Finance Corp announced that it was selling an 80 per cent stake to Chinese investors for $4.2bn late last year. The deal has not been finalised, with ILFC parent AIG indicating that it may consider an IPO instead.

AWAS Aviation Capital, the Irish-based aircraft leasing firm controlled by financier Guy Hands' Terra Firma group, is thought to be looking at a March 2016 IPO. The sales process could begin as early as next year, AWAS boss Ray Sisson said.

A sale of the business would come as aircraft lessors are becoming a more central part of the global airline financing sector.

Airlines buying large commercial jets will need $100bn over the next 12 months alone.

This will soar to $125bn per year over the next decade, according to Avolon estimates. Lessors are likely to increase their share of new-aircraft delivery financing to 50 per cent in the middle of the decade from 40 per cent now. Airlines are increasingly turning to capital markets to fund their expansion plans.

A bumper sale of Avolon would generate another fortune for Clareman Slattery.

He set up and sold International Aviation Management to RBS for €36m in 2001. Slattery then moved into private equity, setting up the high-profile Claret Capital, which invested money raised from the likes of Feargal Quinn and former Anglo boss Sean FitzPatrick.

The company invested in a variety of businesses, ranging from the Channel 6 TV station to casinos in Macau, and some of the world's biggest private equity deals including buyouts at Hertz and HCA.

Sunday Independent

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