Posted on: 26 May 2011 by Mark Howells
BAE Systems is to sell its commercial aircraft lease portfolio and asset management business to investment affiliates of Fortress Investment Group.
The sale, which is expected to close in the third quarter of 2011, is for a cash consideration of $187 million, subject to certain post-completion adjustments. Completion is conditional, amongst other things, upon regulatory approval.
The business, known as BAE Systems Asset Management, is the world’s second largest regional jet lessor by fleet value and the tenth largest aircraft lessor by fleet size. It has 16 lease customers in 11 countries. The business is responsible for the management of 151 commercial aircraft owned by BAE Systems, which are included within the sale, plus the management of third-party-owned commercial aircraft on behalf of airlines and investors.
The support and engineering activities of BAE Systems Regional Aircraft are not included in this sale.
Alan Fraser, managing director of BAE Systems Regional Aircraft, commented, “We believe that this business will have a promising future and that we have found a buyer with the resources and expertise to support the growth of this activity. BAE Systems Regional Aircraft support and engineering businesses will continue to provide the full range of support to the new owner, including continuing airworthiness and engineering services. We are looking forward to continuing our close working relationship with the Asset Management business under its new ownership.”
Peter Briger, co-chairman of Fortress Investment Group and head of Fortress’s credit business, remarked, “We believe that this will prove an outstanding investment for our Limited Partners, and anticipate that Regional Aircraft’s proven business model, and scalability that can support significant growth over time.”