Japanese financial services group to join Avolon’s shareholder base providing a significant credit enhancement
Dublin & Tokyo | 8 August, 2018: Avolon, the international aircraft leasing company, announces that ORIX Corporation (“ORIX”), through its wholly owned subsidiary ORIX Aviation Systems (“ORIX Aviation”), has entered into an agreement to acquire a 30% stake in Avolon from Bohai Capital (“Bohai”) (the “Transaction”). The Transaction is subject to customary closing conditions and Bohai shareholder approval. Bohai’s largest shareholder, HNA Group, has provided its commitment to the Transaction. The Transaction is expected to complete in the fourth quarter of 2018.
Transactions Highlights
ORIX Aviation to acquire a 30% shareholding in Avolon for US$2.2 billion, based on 31 March 2018 NAV subject to customary closing adjustments
Transaction implies an Avolon enterprise value of US$23.7 billion, as at 31 March 2018
ORIX is rated A-/A3/A- by Fitch, Moody’s and S&P respectively. For the 12 months to 31 March 2018 ORIX reported revenue of US$25.6 billion and net income of US$2.8 billion.
Diversifies and strengthens the financial profile of Avolon's shareholder base
Scale investment from an experienced sector participant highlights the attractiveness of the aircraft leasing sector, the Avolon platform and management team
Governance structure enhances protections for minority shareholder and, indirectly, debt investors
Facilitates positive credit rating momentum at Avolon
Enhances Avolon’s profile in the Japanese financial markets and creates the opportunity for further collaboration with ORIX Aviation, a S&P ranked aircraft lessor, asset manager and trading company
Dómhnal Slattery, Avolon CEO, commented: “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.”
Governance & Board
As part of the Transaction, Bohai and ORIX will put in place a new shareholder agreement which includes a governance framework with significant protections for the minority shareholder. On completion of the Transaction, the revised Avolon Board will be comprised of two ORIX Directors, three Bohai Directors, Avolon CEO, Dómhnal Slattery, as executive Director, and one independent Director.