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Avolon launches IPO of 13.6 m. shares valued at between $286 million and $314 million Back
December 1st: Avolon Holdings Limited has launched an initial public offering of 13,636,363 common shares on the new York Stock Exchange (NYSE) valued at between $286 million and $314 million, valuing the company at approx $1.8 bilion
The initial public offering price is currently expected to be between $21 and $23 per share, a statement from the company said, which would result in a total offering size of between $286 million and $314 million. All of the common shares are being offered by the selling shareholders. The selling shareholders have granted the underwriters an option to purchase up to 2,045,455 additional common shares to cover over-allotments, if any. Avolon will not receive any of the proceeds from the offering.

The offering is being made pursuant to a registration statement on Form F-1 filed with the U.S. Securities and Exchange Commission (SEC). Avolon has been approved to list its common shares on the New York Stock Exchange under the symbol “AVOL”.

J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, Citigroup Global Markets Inc., UBS Securities LLC and Wells Fargo Securities, LLC are acting joint book-running managers.

A press release by Avolon said:

"The offering will be made only by means of a prospectus. Copies of the preliminary prospectus related to the offering may be obtained, when available, from J.P. Morgan Securities LLC, via telephone: (866) 803-9204, or standard mail at J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY, 11717, Attn.: Prospectus Dept.; Morgan Stanley & Co. LLC, via mail at Morgan Stanley & Co. LLC, Attn.: Prospectus Dept., 180 Varick Street, 2nd Floor, New York, NY 10014, or Citigroup Global Markets Inc. via telephone: (800) 831-9146, or standard mail at Citigroup, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY, 11717, Attn.: Prospectus Dept.

"A registration statement relating to these securities has been filed with the SEC but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

"About Avolon

Headquartered in Ireland, with offices in China, Dubai, Singapore and the United States, Avolon provides aircraft leasing and lease management services. As of September 30, 2014, Avolon had an owned, managed and committed fleet of 227 aircraft serving 49 customers in 27 countries."

Aviation Finance Fact File
Avolon was set up in 2010 with initial equity funding of over $750 million from three US private equity groups Cinven, CVC Capital Partners and Oak Hill Capital Partners. A second equity raising of $250 million in early 2011 saw the firm's backing exceed $1 billion and this was followed later in the year by the Singapore's Government Investment Corporation (GIC) injecting $300 million to join the three private equity groups as a major shareholder in the lessor, and bring the total equity raised by the company to approximately $1.4 billion.

2011 also saw the lessor's secure significant debt financing, raising over $850 million in debt financing, including $465 million from three US banks, Wells Fargo, Morgan Stanley and Citi and by the time of GIC's investment in October 2011 Avolon had, through debt financing and equity funding, raised capital in excess of $4 billion. In January 2013, Avolon deepened its relationship with Wells Fargo as it founded a $500 million leasing joint venture with the US bank named Avolon Capital Partners which is building a fleet through sale/leaseback transactions. 2011 also saw Avolon reopen the aircraft ABS market with its inaugural asset-backed note issuance, the $636 million Emerald Aviation Finance.

In March 2014 Avolon closed a new $500 million secured debt facility bringing its total capital raised to approximately $7.5 billion since 2010. As of September 30, 2014, Avolon had an owned, managed and committed fleet of 227 aircraft serving 49 customers in 27 countries.

IPO
Avolon hired Morgan Stanley and JP Morgan as advisers on a possible initial public offering of shares and in June filed a registration statement on Form F-1 with the U.S. Securities and Exchange Commission for the proposed offering, which did not specify the number of shares to be sold or the price range. Other steps towards the IPO in the United States included nominating two new faces to its board, in a regulatory submission to the US' SEC in August. Hamid Biglari, currently managing partner at the US-based TGG Group, and whose previous roles include stints at Citi, McKinsey and as a theoretical physicist at Princeton, has been nominated along with Gary Perlin, the recently retired CFO of US financial group Capital One, who also performed the same role at the World Bank, and previously worked at Fannie Mae.

However, the possibility of Avolon becoming the fifth major leasing firm to be listed seemed to recede when China's sovereign wealth fund China Investment Corp (CIC) was teaming up with Aviation Industry Corporate of China (AVIC), a state-owned aerospace and defence company to takeover the lessor, but talks were reported to have ended in October, paving the way for the IPO.

Another private equity-backed lessor founded in 2010, Jackson Square Aviation, was sold to Mitsubishi UFJ Lease & Finance Co. for in excess of $1.1 billion by its owners Oaktree Capital Group LLC. The lessor had a fleet of 76 next generation aircraft when the deal was struck in October 2012. While AWAS, which is backed by private equity firm Terra Firma was also said to be considering an IPO in 2014 before deciding to sell a portfolio of 100 aircraft. While on November 12th aircraft lessor Intrepid Aviation filed for an IPO.

However, one aircraft lessor has been listed so far in 2014. China Aircraft Leasing Company (CALC) listed on the Hong Kong Stock Exchange in July. CALC is the first aircraft lessor to list in Hong Kong, and its pre-listing shareholders included state-owned China Everbright Group, China Aerospace Investment Holdings Ltd, an investment arm of China Aerospace Science and Technology Corporation; and Friedmann Pacific Asset Management Limited, a Hong Kong based asset management & investment company. CALC currently owns and manages a portfolio of 40 commercial aircraft. With primary focus on China, CALC is expanding its footprints into global emerging markets, providing innovative and dynamic leasing solutions to leasing clients around the globe. The IPO raised HK$591 million (approx $80 million). Since it began trading on the Hong Kong Stock Exchange on 11th July the lessors share price has more than doubled.
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