UK-based aircraft manufacturer BAE Systems has sold its regional
aircraft fleet and asset management business to Fortress Investment
Group of the US for $187m (€132.4m).
The business being sold, BAE Systems Asset Management, leases
regional aircraft to 16 lessees, including airlines and investors,
in 11 countries. It manages 151 commercial aircraft owned by BAE
Systems, which are included in the sale, plus the management of
third party owned commercial aircraft on behalf of those airlines
and investor clients.
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Fortress is a global investment manager with $43.1bn of assets
under management, including limited partner funds. It currently
owns 29% of Aircastle, the Stamford, Connecticut-based aircraft
leasing company with 136 aircraft and 64 lessees, which are located
in 36 countries around the world.
The latest deal provides BAE Systems Asset Management with the
funding backing to expand its leasing offering by acquiring other
aircraft for lease. It will also manage those aircraft.
The sale is expected to close in the third quarter of 2011.
Also included in the sale is the third party remarketing
services, which BAE Systems Asset Management began to offer in
March 2011. The support and engineering activities of BAE Systems
regional aircraft business are not included in this sale.
BAE Systems spokesperson said: “Using the funding backing of a
parent such as Fortress will enable BAE to become a fully fledged
leasing company and be in a position to acquire other
portfolios.”
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By GlobalDataBAE Systems Regional Aircraft support and engineering businesses
will continue to provide the full range of support to the new
owner, including continuing airworthiness and engineering services.
lan Fraser, managing director of BAE Systems Regional Aircraft,
said: “We are looking forward to continuing our close working
relationship with the Asset Management business under its new
ownership,”
Peter Briger, co-chairman of Fortress Investment Group and head
of Fortress’s Credit Business, said: “We believe that this will
provide an outstanding investment for our limited partners and
anticipate that Regional Aircraft’s proven business model and
scalability can support significant growth over time.”
BAE Systems has also entered into an agreement to enable the
redemption of $514m of notes issued under a $2.1bn private
placement in 2001. The bond issuance, also known as Systems 2001
Asset Trust (SAT) financing, was executed by BAE Systems to
refinance existing debt relating to the 340 aircraft owned or
leased at that time and also to provide funding for the portfolio.
SAT is due to mature in September 2013 at which point the
outstanding debt would have been due for repayment.
The redemption will be funded from BAE Systems’ available
resources.
