Iceland's Avion Group in talks to sell stake in aircraft unit

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Icelandic investment firm Avion Group is in “serious negotiations” with an undisclosed party to sell a majority shareholding in its aircraft acquisitions unit, Avion Aircraft Trading.

The unit is a wholly-owned subsidiary of Avion Group and was established last year for the purpose of “buying, reconditioning or converting and selling aircraft”, says the Icelandic company.

“If the sale materialises, it will have a material impact on the financial results of the group for the current financial year ending 31 October 2006,” says Avion Group executive chairman Magnus Thorsteinsson in a statement. “The evaluation of the company being used in the sale process is in excess of $100 million and the current book value of the business if $5 million.”

Avion Aircraft Trading’s portfolio consists of eight Boeing 777-200LR freighters, eight Boeing 747-400 freighters, two Boeing 747-400s and five Airbus A300-600s.

The 777 freighters and five of the 747-400 cargo aircraft, deliveries of which begin next year, are to be operated by Avion’s aircraft, crew, maintenance and insurance (ACMI) arm Air Atlanta Icelandic, while the two 747-400 passenger aircraft will be operated on flights for Excel Airways tour operator subsidiary Travel City.

Three of the A300-600s have been sold, one with a conversion to freighter, and the remaining two are in the sale process with a conversion slot booked, says Avion.

An Avion spokesman declines to comment on how much of a shareholding the company is seeking to divest.