Goshawk Aviation has confirmed that it will acquire all of the outstanding shares of SKY Leasing’s (SKY) Irish subsidiary, Sky Aviation Leasing International (SALI), from the Public Sector Pension Investment Board (PSP Investments) and ATL Partners (ATL). PSP and ATL will continue to own SKY Leasing, which, through its entities based in the United States, will continue to act as servicer to aircraft owned by various securitization vehicles.
With the acquisition of 51 owned and committed aircraft from SALI, Goshawk’s portfolio will now consist of 183 owned, managed and committed aircraft with a total fleet value of $9.1bn. The new fleet has an average age of three years with an average remaining lease term of 7.7 years.
Goshawk’s customer portfolio will be further diversified through the addition of 17 new lessees and six new countries resulting in a pro forma company with aircraft on lease to 65 lessees in 35 countries.
The transaction is expected to close in the third quarter of 2018, subject to regulatory approvals and customary closing conditions.
The transaction will be financed by a majority of unsecured debt financing, with assumption of the S-JETS ABS notes transferred with the acquisition and additional contribution from Goshawk’s shareholders.
Goshawk states that these sources of funds will further diversify its current financing sources and will enhance its credit status since the acquisition will diversify its asset base and increase unencumbered assets.
Goshawk highlights the support from its shareholders, Chow Tai Fook Enterprises and NWS Holdings, who take a long-term investment view on the aircraft leasing sector which meets their objectives of generating attractive and steady returns.
Brian Cheng, Chairman of Goshawk and Executive Director of NWS Holdings, commented, “The acquisition is strategic and accelerates Goshawk’s growth while maintaining the quality of its portfolio. We continue to be confident about the aircraft leasing sector and look forward to the further evolution of Goshawk in the years ahead.”
“The acquisition of SALI represents an exciting milestone for Goshawk,” remarked Ruth Kelly, Chief Executive Officer of Goshawk. “The SKY team has built a high-quality portfolio that aligns with our focus on young, liquid aircraft and furthers Goshawk’s growth objectives.”
Following the completion of this transaction, PSP Investments and ATL will continue to own SKY Leasing, which, through its entities based in the United States, will continue to act as servicer to aircraft owned by various securitization vehicles.
In October 2015, PSP Investments and ATL, in partnership with the management team led by Richard Wiley, formed SKY Leasing as a new aircraft leasing platform. In less than three years since its formation, SALI acquired or committed to acquire 51 commercial aircraft, building a high-growth commercial aircraft leasing platform focused on new and young mid-life aircraft.
"We are delighted to have contributed to SALI's growth story, from a start-up into a world-class leasing platform," said Przemek Obloj, Managing Director, Private Equity at PSP Investments. "This journey, taking SALI from an idea to a $3 billion business alongside Richard Wiley, Austin Wiley, Steve Patch, the rest of the management team and ATL Partners, is a great illustration of a successful partnership, fuelled by the financial backing of PSP Investments."
Frank Nash, Chief Executive Officer of ATL and chairman of the board of SKY Leasing, said, " SALI was a perfect expression of our focus on these sectors, as its activities involve all three. It also provided an opportunity to deploy significant amounts of capital globally on behalf of the fund directly and through co-investment by its limited partners. We are very pleased to have helped guide the company through its tremendous expansion."
"I want to thank the team at SALI for having done an outstanding job in building SKY Leasing as a leading full-service aircraft lessor," said Richard Wiley, CEO of SKY Leasing. "The key to our aircraft fleet growth has been the important airline relationships in combination with the long-term support of leading financial institutions. I have also enjoyed working with our shareholders, ATL and PSP, who have helped us build this business together."
JP Morgan served as exclusive financial advisor to Goshawk, while Milbank, Tweed, Hadley & McCloy served as legal counsel to Goshawk.
Sky Leasing was advised by Morgan Stanley with Gibson Dunn, Maples and Calder, and Vedder Price acting as legal advisors. Weil, Gotshal & Manges acted as legal advisor to PSP Investments.