Bohai Leasing subsidiary Avolon intends to acquire 100% equity of aircraft leasing company CAL

According to the news from Zhitong Finance and Economics APP, Bohai Leasing (000415.SZ) announced that, in order to further strengthen the company's market share and competitiveness in the global aircraft leasing industry, and to enhance the company's profitability, the company's controlling subsidiary Avolon plans to acquire 100% equity of aircraft leasing company CAL through its wholly-owned subsidiary AAHL. On September 12, 2024 (New York time), Avolon and its wholly-owned subsidiary AAHL signed a "Purchase and Sale Agreement" and related agreements with Castlelake Aviation LLC (hereinafter referred to as the "seller") and related parties. Avolon intends to purchase 100% equity of CAL by paying in cash. The final transaction price of this transaction will be determined based on the net assets of the target company as of the day before the delivery date (prepared in accordance with US GAAP) and adjusted by the mechanism specified in the "Purchase and Sale Agreement". Based on CAL's net asset book value of $1.416 billion as of March 31, 2024, after deducting the assets to be divested before delivery, related aircraft and corresponding liabilities, and assets exceeding $38 million in cash, the net asset book value of the target company to be acquired is $1.241 billion. After deducting the adjustment amount calculated according to the "Purchase and Sale Agreement", the purchase price of 100% equity of CAL is approximately $1.221 billion (equivalent to approximately RMB 8.673 billion calculated at the middle exchange rate of 1:7.1030 between USD and RMB). The funds for this acquisition will come from Avolon's own funds or self-raised funds. This transaction is beneficial for further leveraging the scale effect and synergy effect of the existing aircraft leasing business and the target company's aircraft leasing business, utilizing Avolon's extensive financing channels and cost advantages, enhancing the profitability of the target company's aircraft assets, strengthening the company's sustainable profitability, and further enhancing the company's relationship with airline customers, as well as increasing the company's market share and competitiveness in the global aircraft leasing industry. After the completion of this transaction, Avolon's own, managed, and ordered aircraft fleet will reach 1,147 aircraft, including 647 owned aircraft, 40 managed aircraft, and 460 ordered aircraft. The average remaining lease term of the fleet is approximately 7.2 years, with an average age of approximately 6.1 years, continuing to consolidate its position as the world's second largest aircraft leasing company, providing aircraft leasing services to 144 airline customers in 64 countries and regions globally. (Based on Avolon's fleet situation as of June 30, 2024)