US concern General Electric Co. (GE) is selling its aircraft leasing division to Irish AerCap Holdings NV in a deal worth more than $30 billion, Report informs referring to Interfax.
In line with the terms of the deal, GE will receive about $24 billion in cash and a 46 percent stake in the combined company.
GE will transfer net assets of about $34 billion to AerCap, and 400 employees of the US concern will also be transferred to the company.
General Electric clarified that it is planned to close the deal in 9-12 months, and the company will use the proceeds from the sale of the business to pay off the debt.
GE Capital Aviation Services, or Gecas, is the largest remaining share of GE Capital, a finance arm that once competed with major US banks but nearly collapsed during the 2008 financial crisis.
Gecas is one of the world’s largest aircraft leasing companies along with AerCap and the American Air Lease Corp. headquartered in Los Angeles. The company leases passenger airliners manufactured by Boeing Co. and Airbus SE, as well as regional passenger and cargo aircraft. Its clients include both major airlines and startups.
As of Dec. 31, Gecas owned assets for $35.86 billion. AerCap has a market capitalization of $6.5 billion and a debt and cash-adjusted value of approximately $34 billion, according to S&P Capital IQ. AerCap’s revenue in 2020 was approximately $4.4 billion, up from approximately $5 billion in the previous few years.
The aviation industry has been hit hard by the coronavirus pandemic, which has led to a sharp drop in international air travel and forced airlines to decommission liners.
Gecas at the end of 2020 received an operating loss of $786 million with revenue of $3.95 billion.