CK Asset to Sell Aircraft-Leasing Business for $4.28 Billion -- Update

By P.R. Venkat

CK Asset Holdings Ltd. is selling its aircraft-leasing business to a consortium involving private-equity firm Carlyle Group Inc. for $4.28 billion as the airline industry continues to face severe challenges from Covid-19.

As risk and return dynamics became increasingly volatile, the industry has experienced increased levels of consolidation, mergers and acquisitions, CK Asset said Friday.

Since the start of the pandemic in late 2019, the aviation sector has been struggling as governments worldwide imposed movement restrictions that crimped demand for leisure and business travel. Though borders started reopening as vaccinations brought the pandemic somewhat under control, the sector continues to face headwinds from new variants of the virus. The latest variant, Omicron, is now pushing some countries to reimpose some of the curbs that were eased mid-year.

"Following an internal consolidation of the group's aircraft-leasing business, the group considered it an opportune time to exit the aircraft-leasing sector and enhance its strategic focus during the pandemic," CK Asset said.

CK Asset's move follows the consolidation trend in the aircraft-leasing sector. In March, General Electric Co. agreed to combine its jet-leasing unit, GE Capital Aviation Services, with rival AerCap Holdings NV in a deal worth $30 billion to create a leasing giant with more than 2,000 aircraft.

The Hong Kong-listed conglomerate is selling Accipiter Finance SARL and Manchester Aviation Finance SARL to a company managed by Carlyle and the Canada Pension Plan Investment Board.

Accipiter and Manchester Aviation own 125 aircraft with leases and have other aircraft in their order book.

The sale will allow CK Asset to unlock the underlying value of its aircraft portfolio and provide the group with the ability to reallocate capital to other investment opportunities, it said.

The company expects to record a divestment gain of $170 million from the deal.

Write to P.R. Venkat at [e-mail]

(END) Dow Jones Newswires

12-23-21 2209ET