Orix swoops for $2.2bn Avolon stake
Japanese financial services buys 30% stake in Dublin-based aircraft lessor
Kate O’Connell TD with Taoiseach Leo Varadkar, John Higgins, president and chief commercial officer, Avolon and Dómhnal Slattery, CEO, Avolon, at the official opening of Avolon’s new Global HQ at No.1 Ballsbridge. Photograph: Robbie Reynolds
Avolon, which is now the third largest lessor in the world, had been denied a top tier rating because of the HNA’s financial problems.
As part of the deal, Bohai will keep 70 per cent of Avolon, but its parent will use the $2.2 billion to pay down debt. Two Orix directors will also come on to Avolon’s seven-person board.
Led by Irish chief executive David Power, Orix Aviation has $10 billion (€8.7 billion) of aircraft under management.
The purchase increases its stake in the $280 billion (€245 billion) global aircraft leasing market, where demand is growing, supported by a rise in low-cost carriers and passenger traffic.
The agreed deal will allow Orix Aviation Systems, a fully-owned unit of Orix, to gain part control of Avolon, which has 562 aircraft, nearly three times more than Orix. Avolon also has a 300-plus aircraft on order with Boeing and Airbus.
“The addition of Orix, an investment grade institution, diversifies and strengthens the financial profile of Avolon’s shareholder base and facilitates positive credit rating momentum,” Avolon said.
“Additionally, the new governance structure enhances protections for minority shareholder and debt investors,” it added.