FLY Leasing Ltd. will acquire 54 Airbus narrowbody aircraft and seven CFM engines on lease to AirAsia Berhad and its affiliates and one Airbus narrowbody aircraft on lease to a third-party airline.
FLY Leasing will also acquire the option to purchase an additional 20 Airbus A320neo family aircraft, not subject to lease, which begin delivering from the manufacturer in 2019.
The transaction will be executed under a definitive agreement that FLY Leasing entered into with AirAsia Berhad and its subsidiary, Asia Aviation Capital Ltd.
At the closing of the initial stage of the transaction, FLY Leasing will acquire 34 Airbus A320-200 aircraft and seven aircraft engines, 33 of which are on lease to five different airlines within the AirAsia Group and one aircraft is on lease to a third-party airline.
FLY Leasing has also agreed to acquire 21 new A320neo family aircraft that will be subject to 12-year leases to AirAsia Group airlines.
In the final stage of the transaction, FLY Leasing will acquire the option to purchase an additional 20 Airbus A320neo family aircraft, not subject to lease.
Under the terms of the agreement, AirAsia Berhad will receive about $1.0 billion in cash and 3,333,333 newly issued FLY Leasing shares at $15 per share as part of the initial stage of the transaction.
Additionally, an affiliate of Onex Corp. and the management team of BBAM Ltd. Partnership will each acquire 666,667 newly issued FLY Leasing shares at $15 per share for total consideration of $20 million. Following the acquisition of shares, the investors will hold a total of 5.5 million shares, or 17% of FLY Leasing's proforma outstanding shares.
The transaction is expected to close in the second and third quarters of 2018. It is part of an acquisition under which FLY Leasing, together with BBAM's other capital partners, Nomura Babcock & Brown and Incline Aviation, will acquire 132 aircraft from AirAsia Berhad and its subsidiary, as well as options to acquire 50 A320neo family aircraft, to be delivered in the future. AAB will also make a $50 million investment in Incline Aviation as part of its consideration.
Vedder Price and Jones Day acted as legal advisers to FLY Leasing. BNP Paribas, Citi, Commonwealth Bank of Australia and Deutsche Bank have provided committed financing to FLY Leasing for the transaction. EY and KPMG acted as tax advisers to FLY Leasing.
