ORIX Corporation (“ORIX”) announced today that, via its group
company in Ireland, ORIX Aviation Systems Limited (“ORIX
Aviation”), which is not only an established aircraft leasing and
trading company but also a leading S&P ranked aircraft asset
manager, has signed an agreement to acquire 30% of the outstanding
shares of Ireland‐based Avolon Holdings Limited (“Avolon”), which
is a leading global aircraft leasing company. The acquisition is
expected to be completed after the necessary approvals and/or
licenses are obtained.
1. Reason for the acquisition of the shares
ORIX entered into the aircraft finance lease business in 1978
and has accumulated aviation experience and knowledge over the past
40 years. In 1991, it established ORIX Aviation in Ireland to get a
foothold in the aircraft operating lease business. Since formation
ORIX Aviation has grown to be a major aircraft lessor, asset
manager and trading company. In addition to the leasing of its own
portfolio aircraft, it has developed a unique asset management
platform that attracts both domestic Japanese and international
investors, and is the only S&P ranked aircraft lease servicer
worldwide with USD10 billion of aircraft assets under management.
At present, ORIX Aviation owns and manages over 200 aircraft and
leases them to more than 70 airlines located in over 30 countries.
ORIX Aviation is headquartered in Dublin with an office in Hong
Kong.
Avolon is a leading global aircraft leasing company focused on
acquiring, managing, leasing and selling commercial aircraft.
Avolon is headquartered in Ireland, with offices in the United
States, the UAE, Singapore, Hong Kong and China. In May 2010,
Avolon was launched by an experienced team of aircraft leasing and
financing professionals, and operated as a private company until
the initial public offering of the business in December 2014.
Avolon operated as a public company listed on the New York Stock
Exchange under the symbol “AVOL” before being acquired by Bohai in
January 2016. Subsequently, Avolon became the core aircraft leasing
brand for Bohai and its parent, HNA Group. In April 2017, Avolon
acquired all of the issued and outstanding equity interest of C2,
the commercial aircraft leasing business of CIT Group.
Avolon focuses on acquiring and maintaining a portfolio of
young, modern, fuel efficient commercial aircraft while seeking to
maximize long-term earnings growth and cash flow generation and
drive attractive risk-adjusted returns through the aviation
industry cycle. The business is operated on a global basis,
maintaining a diverse fleet of aircraft provided to airlines across
different geographic regions. As of June 30, 2018, Avolon’s owned
managed and committed portfolio consisted of 890 aircraft,
including 532 owned aircraft, 30 managed aircraft and 328 committed
aircraft.
The worldwide demand for aircraft is projected to increase due
to the rise in LCCs and the increase in global passenger traffic
also in line with the rapid economic growth of markets, in
particular emerging markets. The number of the worldwide commercial
aircraft fleet is expected to rise from 24,400 in 2017 to 48,540 in
2037, and passenger traffic is expected to grow by an average of
4.7% per year*.
Airline demand for aircraft leasing by airlines is projected to
increase with the objective of achieving flexible fleet planning
and financing. Currently, approximately 40% of the commercial
aircraft in operation worldwide are financed by operating leases.
More growth is expected, and many forecasts expect this ratio to
reach almost 50% in the future.
By virtue of the acquisition of the shares of Avolon, ORIX aims
to achieve sustainable long term growth of its business by way of
strengthening its access to the manufacturer order positions that
Avolon holds and also further expanding its aircraft leasing
business investment universe. ORIX strives to further increase its
presence in the global aircraft leasing market via its
collaboration with Avolon and by utilizing of the considerable
experience and knowledge that ORIX has gained through its long
involvement in both aircraft leasing and financing.
*Source:Boeing Commercial Market Outlook 2018-2037
2. Overview of the entity acquiring shares
(1) Name ORIX Aviation Systems Limited
(2) Address Booterstown Hall,
Booterstown Avenue, Booterstown, Co. Dublin, Ireland (3)
Name and title of representative David Power
Chief Executive Officer
James Meyler
Deputy Chief Executive Officer & Chief
Commercial Officer
(4) Description of business Aircraft
leasing (5) Stated capital USD 300,000
(6) Date of establishment March 6, 1991
(7) Major shareholder and its shareholding percentage
ORIX Corporation 100%
3. Overview of the company whose shares are to be acquired
(1) Name Avolon Holdings Limited (2)
Address PO Box 309, Ugland House, Grand
Cayman, KY1‐1104, Cayman Islands (3) Name and title
of representative Dómhnal Slattery
Director and Chief Executive Officer
John Higgins
President and Chief Commercial Officer
(4) Description of business Aircraft
leasing (5) Stated capital USD 0.00001
(6) Date of establishment
June 5, 2014 (started the business in May
2010)
(7)
Major shareholder and its shareholding
percentage
Global Aviation Leasing Co., Ltd.
62.95% Hong Kong Bohai Leasing Asset
Management
Corp., Limited
37.05%
(8)
Relationship between ORIX and the
company
Capital relationship There is no capital relationship
between ORIX and Avolon. Personal relationship There
is no personal relationship between ORIX and Avolon.
Business relationship ORIX Aviation has
undertaken aircraft sales and purchase transactions with Avolon.
(9)
Consolidated operating results and
consolidated financial position of Avolon for the most recent
financial year
(USD million)
Fiscal year ended
December 31, 2017 Consolidated
net assets 7,332 Consolidated
total assets 27,109
Consolidated net sales
2,368
Consolidated operating income
1,240
Consolidated ordinary income
625 Net income attributable to
shareholders of parent company
534
4. Overview of the counterparties to the share acquisition
(1) Name Bohai Capital Holding Co.,
Ltd. (2) Address No. 93, Huanghe Road,
Urumchi, Xinjiang Uygur
Autonomous Region
(3) Name and title of representative
Yiqun Zhuo
Chairman and Chief Executive Officer
(4) Description of business General
Leasing, Leasing Consulting, Equity Investment, Investment
Consulting and Services (5) Stated capital
RMB 6,185 million (6) Date of establishment
August 30, 1993 (7) Net assets
RMB 31,637 million (as of December 31, 2017) (8)
Total assets RMB 300,394 million (as of
December 31, 2017) (9) Major shareholder and its
shareholding percentage HNA Capital Holding Co., Ltd.
34.91% (1)
Name Global Aviation Leasing Co., Ltd.
(2) Address PO Box 309, Ugland
House, Grand Cayman, KY1‐1104,
Cayman Islands
(3) Name and title of representative
Chuan Jin
Director
Hao Wang
Director
(4) Description of business
Share‐holding (5) Stated capital
USD 4 (6) Date of establishment
July 9, 2015 (7) Net assets USD
5,527 million (as of December 31, 2017) (8)
Total assets USD 27,109 million (as of December 31,
2017) (9) Major shareholder and its
shareholding percentage
Hong Kong Bohai Leasing Asset Management
Corp., Ltd.
100%
(10) Relationship between
ORIX and Global
Aviation
Capital relationship There is no
capital relationship between ORIX and Global Aviation.
Personal relationship There is no personal
relationship between ORIX and Global Aviation. Business
relationship There is no business relationship
between ORIX and Global Aviation.
Status of the related parties ORIX is not a
related party to Global
Aviation.
Bohai Capital Holding Co., Ltd. holds 100% of the outstanding
shares of Hong Kong Bohai Leasing Asset Management Corp., Ltd.
through its wholly owned subsidiary named Tianjin Bohai Leasing
Co., Ltd.
5. Number of the shares to be acquired, acquisition price and
shareholding before and after acquisition
(1) Number of shares held before change
0 shares
(Number of voting rights: 0)
(Percentage of voting rights held: 0%)
(2) Number of shares to be acquired
728,288 shares
(Number of voting rights: 728,288)
(Percentage of voting rights held:
30.0%)
(3) Acquisition price
Ordinary shares of Avolon : USD 2,212
million
Advisor fees, etc. (approximate amount) :
USD 5 million
Total (approximate amount) : USD 2,217
million
(4) Number of shares to be held after change
728,288 shares
(Number of voting rights: 728,288)
(Percentage of voting rights held:
30.0%)
6. Schedule
(1) Date of execution of the share purchase agreement
August 8, 2018 (2) Date of transfer of
shares November 2018 (Scheduled)
7. Outlook going forward
ORIX has disclosed a management target of annual net income
growth at between 4%-8% in its "Mid‐Term Strategic Directions (from
FY 3/2019 to FY 3/2021)" released on October 31, 2017. There is no
change to the management target as a result of the planned share
acquisition.
About ORIX:
ORIX Corporation (TSE: 8591; NYSE: IX) is an opportunistic,
diversified, innovation‐driven global powerhouse with a proven
track record of profitability. Established in 1964, ORIX at present
operates a diverse portfolio of businesses in the operations,
financial services, and investment spaces. ORIX’s highly
complementary business activities span industries including:
energy, private equity, infrastructure, automotive, ship and
aircraft, real estate and retail financial services. ORIX has also
spread its business globally by establishing locations in a total
of 38 countries and regions across the world. Through its business
activities, ORIX has long been committed to corporate citizenship
and environmental sustainability. For more details, please visit
our website: https://www.orix.co.jp/grp/en/ (As of March 31,
2018)
Caution Concerning Forward Looking Statements:
These documents may contain forward‐looking statements about
expected future events and financial results that involve risks and
uncertainties. Such statements are based on our current
expectations and are subject to uncertainties and risks that could
cause actual results that differ materially from those described in
the forwardlooking statements. Factors that could cause such a
difference include, but are not limited to, those described under
“Risk Factors” in the Company’s annual report on Form 20‐F filed
with the United States Securities and Exchange
Commission and under “(4) Risk Factors” of the “1. Summary of
Consolidated Financial Results” of the “Consolidated Financial
Results April 1, 2017 – March 31, 2018.”
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180808005583/en/
for ORIX CorporationAmanda Rider,
972-770-5083arider@marketwave.bizorCorporate Planning Department,
+81-3-3435-3121
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