More than seven months after first announcing its intention to explore a possible sale of its aviation finance leasing business, Standard Chartered has found a buyer from Saudi Arabia.
Standard Chartered has signed agreements for the sale of its global aviation finance leasing business to Aircraft Leasing Company (AviLease), according to a statement, which is owned by the Public Investment Fund, Saudi Arabia's sovereign wealth fund. The bank first announced that it was exploring options for the business in January.
The deal includes an initial total cash consideration of $700 million and is expected to complete towards the end of 2023. Thereafter, the bank will record an estimated gain of $300 million and an increase in Common Equity Tier 1 capital ratio by around 19 basis points. Standard Chartered is currently being supported by J.P. Morgan Securities as its financial advisor.
The transaction will include the sale of 100 percent shareholding in Pembroke Group Limited (Isle of Man), Pembroke Aircraft Leasing Holdings Limited (Ireland) and Pembroke Aircraft Leasing (Tianjin) Limited (China). AviLease is also funding the repayment of approximately $2.9 billion in net intra-group financing from the Standard Chartered.
Track Record
Standard Chartered’s aviation finance business owns and manages a modern fleet portfolio of over 120 aircraft on lease to over 30 of the world’s leading airlines. In 2022, it recorded a pre-tax profit of $18.2 million, a post-tax profit of $15.6 million, gross assets of $3.8 billion and a net asset value of $300 million. And in 2021, it posted a pre-tax and a post-tax profit of $51.8 million and $44.9 million, respectively.
«The sale of our Aviation Finance leasing allows us to continue to focus our efforts on those areas where we are most differentiated and to further progress our Return on Tangible Equity journey,» said Simon Cooper CEO of corporate, commercial & institutional banking and Europe & Americas.
Launched in 2022, AviLease is a Riyadh-headquartered firm that offers leasing, trading and asset management services. The firm is seeking rapid expansion to become one of the world’s top 10 leasing companies.
