SAirGroup is taking a 15% stake in Willis Lease Finance (WLFC) after completing contractual negotiations with the US aeroengine lessor's shareholders under the terms of a letter of intent signed in June.
The Swiss company's aircraft leasing subsidiary Flightlease and maintenance unit SR Technics are jointly acquiring 1.3 million newly issued WLFC shares worth $19.5 million, and taking an option to increase their holding to 34.9%, subject to shareholder approval.
In addition SR Technics will buy WLFC's parts distribution business Willis Aeronautical Services and the company's 50% holding in overhaul firm Pacific Gas Turbine Center. The two disposals will net Sausalito, California-based WLFC a cash gain of $31 million after repayment of related debt. The deal will also see WLFC acquire five engines worth $42.6 million from SR Technics and lease them back to the seller for up to 10 years.
WLFC says it plans to invest the net proceeds from the various transactions, which are expected to close by the end of the year, in growing its leasing business and supporting the engine leasing requirements of Swissair, SR Technics and Flightlease and their respective customers. SR Technics will provide maintenance and parts services to the US company.
"WLFC will now focus on expanding its engine leasing business and offering innovative, bundled services of maintenance, repair and overhaul, and engine leasing to our airline clients," says WLFC president and chief executive (CEO)Charles Willis.
SR Technics president and CEO Hans-Ulrich Beyeler says the tie-up is "solidly in line with our total service provider strategy" and "provides us with a significant foothold in the USA". SR Technics already operates an aircraft maintenance and modification centre at Palmdale in California.
Flightlease president and CEO Hans Jorg Hunziker says the deal puts them "squarely in the engine leasing arena, complementing our aircraft leasing joint venture with GATX through which we have become the third-largest aircraft leasing company in the world".
Source: Flight International
