Report of €12bn sale value for Avolon firm dismissed by Chinese

The Chinese company behind the potential acquisition of an Irish aircraft leasing firm has moved to deny reports the deal has been valued at €12 billion.

Dublin-based Avolon is in ongoing talks with a subsidiary of China's Avic Capital, the country's largest aerospace company.

Papers have been filed with the US Securities Exchange Commission (SEC) ahead of the anticipated sale, but Avolon was unable to comment on negotiations, a spokesman said.

Report denied

However, yesterday, the financing arm of Avic released a statement to the

Shanghai

Stock Exchange denying a report its parent company and sovereign wealth fund

China

Investment Corporation (CIC) were buying Avolon for €12 billion.

The Irish Times

had previously reported the deal was understood to be worth up to €3.7 billion, including debt.

Avic said it was negotiating with “relevant parties” and had begun reviewing Avolon’s finances.

“The company has not reached a binding agreement or offer with relevant parties regarding the acquisition of Avolon and cannot guarantee the completion of the deal,” it said, adding there were “bigger inaccuracies” in the previous report on the deal, without being more specific.

Avic said in a separate statement it was halting trading of its Shanghai shares for five days from yesterday.

Avolon was launched in May, 2010, and is now one of the world’s leading aircraft- leasing firms, with a focus on acquiring, managing and selling commercial aircraft.

China Business News reported earlier this month that Avic and CIC were jointly seeking to acquire Avolon for €12 billion.

Reuters news agency reported the two companies were in talks to buy it for $4 billion to $5 billion, including debt.

Avic said last September it was interested in buying overseas lessors as it expands its fleet to meet rising domestic travel demand.

Last month, the China Banking Regulatory Commission said financial institutions with aircraft-leasing businesses should look for expansion and fundraising opportunities overseas.

Strategy

Papers filed to the SECoutline Avolon’s strategy “to build and maintain a portfolio of young, modern, fuel-efficient commercial aircraft while seeking to maximise long-term earnings growth”.

Its portfolio of 202 aircraft is now worth $4,388 million in aggregate net book value.