CK Asset to Sell Aircraft-Leasing Business for $4.28 Billion -- Update
December 23 2021 - 10:24PM
Dow Jones News
By P.R. Venkat
CK Asset Holdings Ltd. is selling its aircraft-leasing business
to a consortium involving private-equity firm Carlyle Group Inc.
for $4.28 billion as the airline industry continues to face severe
challenges from Covid-19.
As risk and return dynamics became increasingly volatile, the
industry has experienced increased levels of consolidation, mergers
and acquisitions, CK Asset said Friday.
Since the start of the pandemic in late 2019, the aviation
sector has been struggling as governments worldwide imposed
movement restrictions that crimped demand for leisure and business
travel. Though borders started reopening as vaccinations brought
the pandemic somewhat under control, the sector continues to face
headwinds from new variants of the virus. The latest variant,
Omicron, is now pushing some countries to reimpose some of the
curbs that were eased mid-year.
"Following an internal consolidation of the group's
aircraft-leasing business, the group considered it an opportune
time to exit the aircraft-leasing sector and enhance its strategic
focus during the pandemic," CK Asset said.
CK Asset's move follows the consolidation trend in the
aircraft-leasing sector. In March, General Electric Co. agreed to
combine its jet-leasing unit, GE Capital Aviation Services, with
rival AerCap Holdings NV in a deal worth $30 billion to create a
leasing giant with more than 2,000 aircraft.
The Hong Kong-listed conglomerate is selling Accipiter Finance
SARL and Manchester Aviation Finance SARL to a company managed by
Carlyle and the Canada Pension Plan Investment Board.
Accipiter and Manchester Aviation own 125 aircraft with leases
and have other aircraft in their order book.
The sale will allow CK Asset to unlock the underlying value of
its aircraft portfolio and provide the group with the ability to
reallocate capital to other investment opportunities, it said.
The company expects to record a divestment gain of $170 million
from the deal.
Write to P.R. Venkat at venkat.pr@wsj.com
(END) Dow Jones Newswires
December 23, 2021 22:09 ET (03:09 GMT)
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