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Sunday 9 December 2018

Private equity firm RRJ takes stake in Avolon parent entity

Irish-founded Avolon, run by Dómhnal Slattery, is the world's third-largest aircraft leasing firm, with a fleet value of $19bn according to FlightGlobal. Stock image
Irish-founded Avolon, run by Dómhnal Slattery, is the world's third-largest aircraft leasing firm, with a fleet value of $19bn according to FlightGlobal. Stock image

Cathy Chan

Private equity firm RRJ Capital has invested about $1.3bn (€980m) in entities part-owned by HNA Group, including the Irish aircraft lessor Avolon, according to a person with knowledge of the matter.

RRJ purchased preference shares convertible into minority stakes in two HNA-linked special purpose vehicles (SPVs) earlier this year, the person said, asking not to be identified because the information is confidential.

One SPV owns Avolon while the other holds networking and software distributor Ingram Micro, the person said.

RRJ is seeking to capitalise on heavily indebted HNA's efforts to restructure.

Chinese conglomerate HNA has sold more than $16bn of assets this year to repay debt it took on during a multi-year buying spree that drew the attention of Chinese regulators.

Irish-founded Avolon, run by Dómhnal Slattery, is the world's third-largest aircraft leasing firm, with a fleet value of $19bn according to FlightGlobal.

RRJ, which is run by former Goldman Sachs banker Richard Ong, bought the SPV preference shares to put the firm in a position to invest more if HNA decides to dispose of any Avolon or Ingram assets, or to profit if HNA takes the companies public, the person said.

It is also investing about $1bn together with Singapore state investment firm Temasek in HNA's Swiss airline catering company Gategroup Holding, sources have said.

The $1.3bn deployment also involves a small investment in a fourth HNA Group company, the person said, while declining to identify the firm.

Alan Ngo, a Hong Kong-based official at RRJ, declined to comment, as did an HNA representative. (Bloomberg)

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