Boeing Capital (BCC) has agreed to sell about $2 billion in non-core financing assets, including loans and leases on business aircraft, to GE Commercial Finance. In January, BCC announced it would to sell or wind down its commercial financial services group to refocus on financing Boeing's commercial aircraft and military products.
Terms of the all-cash deal have not been revealed, but BCC says it will "receive a premium above net asset value" when the transaction closes later this quarter. BCC expects the deal to generate about $1.7 billion in deployable cash, after taxes and expenses, which will be used for debt repayment, re-investment and dividends to parent Boeing. The sale will leave BCC with a customer financing portfolio of around $10 billion, mainly for commercial aircraft.
GE Commercial Finance president and chief executive Mike Neal says the acquisition is in line with its growth plans and brings an attractive portfolio of loans and leases on corporate aircraft, manufacturing equipment, trucks and ships, mostly in the USA.
"This acquisition of a seasoned, balanced portfolio is very much in line with our growth plans for 2004,"he adds.
GE is already a leading financer of business aircraft and acquired most of Bombardier Capital's business-jet portfolio in August last year for $339 million.
Stamford, Connecticut-headquartered GE Commercial Finance has assets of over $230 billion.
Source: Flight International
