Sale-Leaseback Agreement Is First Major Deal Since Buying Allco
Aviation
Hong Kong Aviation Capital ("HKAC")
says it will lease three new Airbus 320 aircraft to IndiGo Airlines
of India. The leases will start on delivery of the aircraft new
from Airbus to IndiGo in 2011. In addition, HKAC announced Monday
the agreement by IndiGo to extend the leases of four existing A320
aircraft.
The three new A320s will be delivered at manufacturer list
prices totaling approximately $200 million, and will be on lease to
the airline for a period of six years. HKAC is closing the purchase
of the new aircraft with support from significant Chinese banking
and financial institutions. Upon delivery of the new aircraft, HKAC
will have a total of ten A320s on lease to IndiGo. The transaction
expands its existing 68 aircraft portfolio with assets totaling
approximately $3 billion.
HKAC is an Aviation leasing and investment company that includes
HNA Group Co., Ltd., China and an affiliate of Bravia Capital, New
York as shareholders.
Following the successful acquisition of the Allco aviation
portfolio in January 2010, HKAC has transitioned the existing fleet
and management, brought on key senior hires, and adopted a new
business plan, to leverage its significant capital position by
providing liquidity to operators with a target of growing the
business to a top 5 operating lessor.
"The announcement of this deal, coming so quickly after the
transition of HKAC's business model, demonstrates HKAC's strong
ambitions in the aircraft leasing business and is an important step
in the company's continued development and global expansion," said
Mathis Shinnick, CEO of Hong Kong Aviation Capital. "This
transaction demonstrates our belief in the business model of IndiGo
and its continued success. We believe IndiGo is a very well-run
airline in India, as evidenced by its proven profitability, strong
operating metrics, and balance sheet stability. We believe this
deal will be very positive for HKAC, its shareholders, and the
airline."
"We are extremely optimistic about the Indian aviation market,"
said Bharat Bhise, CEO of Bravia Capital Partners. "Following the
2008 downturn, India has seen one of the strongest rebounds
globally and current demand levels and load factors are the highest
ever. IndiGo has set the standard for the LCC space in India by
profitably running an airline despite daunting hurdles of high
costs primarily as a result of poor infrastructure."