Orix Aviation is to acquire a 30% shareholding in international aircraft leasing company Avolon in a deal worth $2.2 billion.
On completion of the deal, the revised Avolon board will have two Orix directors, three directors from Bohai Capital, one independent director and Avolon CEO Dómhnal Slattery as executive director.
The purchase is expected to complete in the fourth quarter of 2018.
For the year to the end of March 2018, Orix reported revenue of $25.6 billion and net income of $2.8 billion.
Slattery said: “Orix is a strong, investment grade institution with a proven track record in the leasing sector over multiple industry cycles.
“We are delighted to welcome Orix as a shareholder alongside Bohai. This transaction builds on this team’s track record of partnering with leading global financial institutions as shareholders. We will benefit from Orix’s experience and relationships as we continue to build Avolon’s financial strength and industry franchise.
“Our new shareholder structure and the associated enhancements to our governance framework will also accelerate our momentum towards an investment grade rating – a key objective for our business.”
In its recent Q2 update, Avolon revealed it had an owned and managed fleet of 562 aircraft, with total orders and commitments for 328 new technology aircraft, making it the world’s third-largest aircraft lessor in the $280 billion global aircraft leasing market. U.S.-listed AerCap and General Electric’s GE Capital Aviation Services are the world’s top two aircraft lessors, while Orix Aviation is the twelfth largest lessor.
Avolon’s fleet utilisation rate for Q2 2018 was 99.7%, with a total customer base of 156 airlines in 64 countries.
It is headquartered in Ireland, with offices in the United States, Dubai, Singapore, Hong Kong and Shanghai. It is an indirect subsidiary of Bohai Capital Holding, a Chinese public company listed on the Shenzhen Stock Exchange.
HNA bought Avolon for $2.5 billion in 2015, through its Bohai division, and Avolon then purchased the aircraft leasing arm of CIT Group for $10.4 billion in 2016.
