British multinational bank Standard Chartered has today announced the sale of its aviation financing business to AviLease, the Riyadh-based firm owned by the Public Investment Fund.
It is understood the sale has taken place for an initial total cash consideration of $700 million, with the deal expected to be concluded by year-end.
Without further ado, let’s get into it…
Standard Chartered Sells Aviation Business to AviLease…
In a total deal valued at $3.6bn, the aircraft leasing platform at Standard Chartered, which includes the Pembroke Group, will see 167 aircraft on lease to 46 global carriers handed over to AviLease.
It is understood that this acquisition is part of the Saudi lessor’s plan to be a top-10 company by the end of this decade.
Fahad Al-Saif, the Chairman of AviLease had this to say on the acquisition:
“The Standard Chartered leasing business is an industry-leading platform combined with a team of high-calibre professionals with an outstanding reputation.”
“This acquisition will propel AviLease and will in turn support Saudi Arabia’s aviation ecosystem, on our path to help realize the Saudi Vision 2030’s objective of diversifying the economy and adding high value employment opportunities for Saudi citizens.”
Adding to this was Simon Cooper, the CEO of Corporate, Commercial & Institutional Banking and Europe & Americas at Standard Chartered:
“We wish AviLease every success with its strategy to develop further the business for continued growth, and delivering on its ambition, to be a significant global player in the aviation leasing sector.”
“I want to thank our Standard Chartered Aviation Finance colleagues, whose strong commitment to building an outstanding franchise over more than 15 years has enabled the success of this transaction.”
A Major Global Shift in the Leasing Market…
This acquisition does represent a major global shift in the leasing market, with AviLease aiming for the skies thanks to its backing under the Public Investment Fund.
It also highlights the wide scope and berth that the Public Investment Fund (PIF) is giving when it comes to its aviation infrastructure.
Within the AviLease creation, the PIF has also earmarked money for more airports to be built and upgraded around Saudi Arabia, as well as more planes for its existing carrier SAUDIA, and the new entrant of Riyadh Air.
Looking ahead, it’s going to be interesting to see how much larger in size AviLease will become, especially as part of the Vision 2030 program in Saudi Arabia continuing at full pace.
It also gives the PIF access to more aircraft, which can later be used for airlines within Saudi Arabia, and will form the foundation for its new and existing aircraft going into the future.
All to play for, but an interesting thing to watch, that’s for sure.
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