# Standard Chartered sells its global aviation finance leasing business to AviLease

- Link: https://www.directorstalkinterviews.com/standard-chartered-sells-its-global-aviation-finance-leasing-business-to-avilease/4121126189
- Published: 2023-08-29T07:34:50+01:00
- Author: Amilia Stone

**[Standard Chartered plc](https://www.directorstalkinterviews.com/ftse-company/standard-chartered/stan.l)**(
LON:STAN) has signed agreements dated 28 August 2023 for the sale of its global 
aviation finance leasing business (through the sale of shares in relevant subsidiaries
and minority equity interests held by the Standard Chartered Group engaged in such
business) for an initial total cash consideration of US$0.7 billion to Aircraft 
Leasing Company, owned by the Public Investment Fund, Saudi Arabia’s sovereign wealth
fund. The Consideration is subject to adjustment with reference to the net asset
value of the business at completion. The Consideration (and its adjustment) has 
been determined after arm’s length negotiations as part of a competitive process.

Today’s announcement follows Standard Chartered’s statement in January 2023 that
it intended to explore alternatives for the future ownership of its global aviation
finance business. The sale is expected to complete towards the end of 2023.

Headquartered in Riyadh, Saudi Arabia, AviLease was launched in 2022 and offers 
leasing, trading and asset management services. The company’s business strategy 
is to expand rapidly to become one of the world’s top 10 leasing companies.

> **Simon Cooper, Chief Executive Officer of Corporate, Commercial & Institutional
> Banking and Europe & Americas at Standard Chartered, said**: “The sale of our 
> Aviation Finance leasing allows us to continue to focus our efforts on those areas
> where we are most differentiated and to further progress our Return on Tangible
> Equity journey. I want to thank our Aviation Finance colleagues, whose solid commitment
> to building an outstanding franchise over more than 15 years has enabled the success
> of this transaction.”

Standard Chartered’s Aviation Finance business is a leading global aircraft leasing
and financing operation. It owns and manages a modern fleet portfolio of over 120
aircraft on lease to over 30 of the world’s leading airlines. In 2022, the aviation
leasing business recorded a profit before tax of US$18.2 million, a profit after
tax of US$15.6 million, gross assets of US$3.8 billion and a net asset value of 
US$0.3 billion and in 2021 a profit before tax of US$51.8 million and a profit after
tax of US$44.9 million. The transaction includes the sale of 100% shareholding in
each of Pembroke Group Limited (Isle of Man), Pembroke Aircraft Leasing Holdings
Limited (Ireland) and Pembroke Aircraft Leasing (Tianjin) Limited (China). Upon 
completion of the sale these companies will no longer be subsidiaries of Standard
Chartered. AviLease is also funding the repayment of approximately US$2.9 billion
of net intra-group financing from the Standard Chartered Group.  The Intra-Group
Loan is subject to adjustment with reference to the amount due at completion.

On completion of the transaction Standard Chartered will record an estimated gain
of approximately US$0.3 billion and an increase in Common Equity Tier 1 capital 
ratio by around 19 basis points. Standard Chartered expects to include the net proceeds
from the transaction within the overall management of the capital and liquidity 
position of Standard Chartered and its subsidiaries.

The Agreements are subject to customary closing conditions, which remain to be satisfied
as at the date of this announcement. Standard Chartered continues to be supported
by J.P. Morgan Securities PLC as its financial advisor.

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