AerCap's sale of its equity interest in Air Lease Securitisation "creates significant liquidity" for new investment opportunities for the lessor, according to its chief executive officer.
Speaking on a conference call today, Aengus Kelly said the lessor is looking at "asset acquisitions or share repurchases or a combination of both" following the sale to Guggenheim Partners, which closed yesterday.
"The transaction will generate approximately $375 million of free cash inclusive of future servicing fees," he says. That amount is inclusive of servicing fees as AerCap will continue as servicer on the securitsation.
The lessor will also record an up-front charge of $55 million related to the sale, Kelly says.
"However in subsequent periods, approximately $40 million, net of tax, will be recovered via our servicing fee arrangement and the amortisation of a portion of the up-front charge."
He adds: "This results in an effective loss on disposal of approximately $15 million, which primarily relates to the legal, tax, accounting and investment banking fees associated with the transaction."
ALS' 50-aircraft portfolio comprises 33 A320 family aircraft, 13 737 units and four "other" aircraft with an average life of 11 years.