Dublin-based aircraft lessor Avolon has completed the purchase of a portfolio of planes from investment manager Castlelake in a deal worth almost €1.2 billion.
Avolon agreed to pay about $1.2 billion (€1.17 billion) for Castlelake Aviation Limited from Castlelake LP’s aviation platform, Avolon’s Chinese parent company, Bohai Leasing, said in September when details of the deal were first made public.
The portfolio’s total assets were valued at $5 billion at the end of March, and will “accelerate Avolon’s earnings growth, building its fleet at attractive yields”, the company said at the time.
Castlelake has as much as $3.3 billion of transferable debt “available to Avolon on closing, with the balance funded from Avolon’s existing sources of liquidity”, it added.
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The acquisition includes a portfolio of 106 aircraft on lease and commitments for 10 new-technology aircraft.
Following the acquisition, Avolon’s fleet increases to 1,129 aircraft, including 664 owned and managed aircraft, and commitments for 465 new-technology aircraft.
About two-thirds of the planes are narrow body, while 70 per cent are so-called new-generation aircraft and have a weighted age of 4.7 years with an average of 8.4 years remaining on their leases.
“This transaction accelerates our growth plans adding a portfolio of assets that will further strengthen our cash flow and earnings profile,” said Avolon chief executive Andy Cronin in September.
“They are complementary to our existing portfolio and will increase our fleet at attractive yields, supporting our positive ratings trajectory.”
Joe McConnell, Castlelake partner and deputy co-chief investment officer, described the deal was “a win-win for all parties”.
He said it would serve to return capital to investors, position lessees for “ongoing high-quality asset management services”, and “provide Avolon with a fleet of high-quality aircraft assets”.
Avolon was advised on the transaction by Clifford Chance and KPMG.
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