RBS in €7.3bn sale of Dublin-based aircraft business


ROYAL BANK of Scotland has completed the $7.3 billion (€5.8 billion) sale of its Dublin-based aircraft leasing business to a consortium led by Japan’s Sumitomo Mitsui Banking Corporation (SMBC). The deal is the biggest sale of an aircraft-leasing business in the world.

The sale was part of UK bank RBS’s divestment of non-core assets, undertaken to deleverage the business and bolster its balance sheet. The company will remain headquartered in Dublin, where more than 50 specialists are employed. The firm will retain its customer base of over 100 airlines and 40 investors in more than 40 different countries.

SMBC Aviation Capital chief executive Peter Barrett said the existing platform was sold to the consortium in its entirety and includes a portfolio of 203 aircraft with commitments to purchase a further 82 by 2015. He said the deal was a great vote of confidence for Ireland: “It’s the largest-ever acquisition of an aircraft leasing company and it’s Irish.”

Mr Barrett said the plan was to grow the business and fleet size – which would have positive implications for jobs in Ireland.

He added that being involved in the Sumitomo Mitsui institutions would bring huge credibility and global reach to the company which would ultimately help it to grow.

“I am delighted that the company has been successfully transferred to an owner group that has a clear commitment to using its robust capital structure and global reach to help us realise our ambitions for significant future growth.”

Mike Minoura, deputy president and head of the international banking unit of SMBC, said the integration process was already under way and that the company would be providing further details on specific plans for the new business in due course.

The new entity, called SMBC Aviation Capital, is the world’s fourth-largest aircraft lessor by owned and managed fleet value. The business has been profitable since inception. It has 69 staff in Dublin and eight in other locations in Europe, the US and Asia.

As of June 30th, 2011, RBS Aviation Capital had gross assets of $7.2 billion.

SMBC will have 30 per cent of the company, while Sumitomo Mutsui Financial Group will have 60 per cent, and Sumitomo Corporation will have 10 per cent.