Fly Leasing reported to be considering a sale

Irish aircraft financier hires Goldman Sachs to review its business

Colm Barrington, former chairman of Aer Lingus.

Colm Barrington, former chairman of Aer Lingus.

 

Fly Leasing, the aircraft financier run by former Aer Lingus chairman, Colm Barrington, is reported to be considering a sale.

Dún Laoghaire-based, New York-listed Fly owns 86 aircraft, worth around $2.7 billion (€2.2 billion ), which it has leased to 39 airlines around the world.

According to trade publication Airfinance, the Irish company has hired merchant bank Goldman Sachs to review the business, including the potential for a full or partial sale.

The reports added that the bankers had invited first-round bids on the company’s aircraft, with a possible second round beginning later this month.

A Fly Leasing spokesman said the company did not comment on market rumours or speculation.

Fly Leasing’s shares were up more than 6 per cent at $10.13 shortly after 7:30pm Irish time on Wednesday. They had closed at $9.52 in New York the previous day, which was a 2 per cent increase.

Late last month Fly’s stock was trading at more than $10, hitting $10.40 on December 30th.

Aircraft lessors buy planes from manufacturers using a combination of their own cash and debt. They rent the craft to airlines, using the revenue to pay off their borrowings. However, these companies face threats to their revenues and the value of their aircraft as airlines struggle with the impact of Covid-19. Many have agreed to defer rents from customers.

In November, Fly reported that it lost $8.1 million in the three months ended September 30th, against a net profit of $51.7 million during the same period in 2019.

The company said it had taken out a new five-year term loan of $180 million, which it secured against 11 of its craft, to buttress its balance sheet. It had $307.5 million in cash, of which $285 million was unrestricted.

Mr Barrington noted that the company had begun to receive repayment of deferred rents as some airlines were getting government support, allowing them to meet obligations.

“Fly continues to have a historically low debt to equity ratio, no orders for aircraft or other capital commitments and no significant near-term refinancing requirements,” he said.