Seattle-based operating lessor Boullioun Aviation Services is being offered for sale by WestLB in what should lead to the third ownership change in six years.
The German bank has been hurt by its investment in Boullioun, which saw the value of its aircraft portfolio fall sharply after the 2001 terrorist attacks. WestLB says it wants to dispose of the leasing company as part of a restructuring plan intended to shift focus away from non-core activities and concentrate on the European banking sector.
Boullioun has a portfolio of 127 owned and managed, mostly narrowbody, aircraft and as of January it was the world's seventh-largest lessor based on fleet value estimates. It has two outstanding Next Generation 737 orders for delivery this year, plus 21 more A320 family aircraft for delivery by mid-2007.
WestLB acquired it from Deutsche Bank early in 2001. Deutsche Bankhad only bought the company from Sumitomo Trust and Banking at the end of 1998.
But WestLB is not looking to exit the operating leasing sector altogether as it plans to retain a 35.5% stake in Singapore Aircraft Leasing Enterprise (SALE), which it regards as having better growth prospects. SALE was established in 1993 by Boullioun and Singapore Airlines and today has a portfolio of 60 aircraft and 16 more on order.
Just before news of WestLB's plan to put Boullioun on the market broke, WestLB transferred Boullioun's 35.5% stake in SALE to itself. "The transfer of ownership reflects a decision by the bank to de-link its interests in the two leasing businesses and to play a direct role in the development of SALE," says a member of WestLB's managing board, Klaus-Michael Geiger.
NICHOLAS IONIDES SINGAPORE
Source: Airline Business
