Abu Dhabi-based investment company Waha Capital PJSC, currently the largest shareholder of New York-listed AerCap Holdings N.V. with a 26.3% stake, has agreed to vote in favour of the aircraft leasing company’s proposed acquisition of International Lease Finance Corporation (ILFC) from American International Group (AIG).
Under the deal, AerCap will acquire 100% of the common stock of International Lease Finance Corporation. AIG will receive $3.0bn in cash and 97.6 million newly issued AerCap shares. Based on the closing share price of AerCap’s ordinary shares on Friday 13 December 2013, the total consideration has a value of approximately $26bn including the assumption of the outstanding ILFC net debt of $21bn.
Upon closing of the transaction, AIG will own approximately 46% of the combined company, while the existing AerCap shareholders will own approximately 54% of the combined company. Waha Capital, which currently has a 26.3% stake in AerCap, will see its shareholding reduced to approximately 14%. The transaction is expected to close in the second quarter of 2014, subject to approval by AerCap shareholders, receipt of necessary regulatory approvals and satisfaction of other customary closing conditions.
Salem Rashid Al Noaimi, CEO and Managing Director of Waha Capital, and a Board member of AerCap, said, “We have been a long-term partner of AerCap and as a key investor we are supportive of this transaction which we expect to be value enhancing for AerCap’s existing shareholders and indirectly for our own shareholders. This transaction uniquely positions AerCap as the leading aircraft leasing company in an industry with strong growth prospects over the coming years.”
The combined portfolio of assets held by AerCap and International Lease Finance Corporation will be concentrated in modern, fuel efficient aircraft with over 85% of the fleet by value consisting of A320, A330, Boeing 737NG and Boeing 777 family aircraft. Further, AerCap will benefit from over $25bn of future aircraft deliveries presently in the combined order book. This represents substantial embedded future growth with attractive aircraft types, and favourable pricing and delivery dates.
The cash portion of the consideration is expected to be funded through a combination of new debt financing and cash of the combined company. The combined company will retain the name AerCap, and ILFC will become a wholly-owned subsidiary of AerCap.
AerCap’s CEO Aengus Kelly has commented, “AerCap’s acquisition of ILFC will create the leading global franchise in the aircraft leasing industry. This transaction presents a unique strategic opportunity to bring together the outstanding and experienced personnel from both companies and two attractive portfolios of modern aircraft on lease to a highly diversified customer base. Further, we believe AerCap will now have the most attractive order book in the industry. With these combined resources, along with a strong liquidity profile, we will drive high levels of stable long term profitability and cash flows for the benefit of all our stakeholders.”