Business News

Bohai Leasing to acquire 20% strategic interest in Avolon for $429m

By Business & Finance
14 July 2015
Avolon Dómhnal Slattery
Dómhnal Slattery, CEO, Avolon

Avolon, the international aircraft leasing company, and Bohai Leasing Co., the Chinese leasing and financial services company affiliated with HNA Group, today announce that they have entered into an agreement.

Bohai will make a cash tender offer for 20% of the outstanding common shares of Avolon at a price of $26 per common share under the agreement.

The cash tender offer of US$26 per share represents a 14.5% premium to Avolon’s volume-weighted average price last week (July 6th-10th, 2015) and a 30% premium to Avolon’s Initial Public Offering at US$20 per share in December 2014, reflecting the substantial embedded equity value of Avolon’s existing portfolio and its sector-leading platform.

This strategic investment by Bohai reinforces Avolon’s position as a leading independent aircraft lessor and allows Bohai to more rapidly expand its exposure to the global aircraft leasing sector. Bohai’s strong presence in the aviation and transportation finance and leasing sectors in China will help strengthen Avolon’s relationships in the rapidly growing Chinese aviation market.

The directors of both Avolon and Bohai unanimously support the transaction and believe this strategic investment by Bohai will deliver long-term value for shareholders in both companies.

Denis Nayden, Avolon’s Chairman, commented: “Our objective at Avolon is to accelerate our growth and build on our position as a leading global aircraft lessor. Bohai Leasing’s strategic investment enhances Avolon’s profile, positioning and relationships in the Chinese aviation market – a market which we believe offers one of the most compelling growth opportunities in global aviation over the next two decades. Today’s announcement is another positive step in the Avolon journey and we are excited by the growth potential and prospects for the business.”

Dómhnal Slattery, Avolon’s CEO, said: “The acquisition of a 20% stake in Avolon by Bohai, at a premium to our current share price, reflects their confidence in the outlook for the sector, the attractiveness of the Avolon investment case and the strength of our global franchise. We are proud to welcome Bohai as a strategic investor in Avolon and look forward to developing our relationship with both Bohai and the broader HNA Group”.

Chris Jin, CEO of Bohai, commented: “Avolon is a leading global player in the aircraft leasing industry and we are delighted to announce this strategic investment. Our vision at Bohai is to build each of our transportation finance businesses into global leaders for the benefit of Bohai shareholders. This investment in Avolon will bring Bohai an increased presence in the global aircraft leasing sector and Bohai will have a strong interest in benefiting from Avolon’s profitable growth.”