Aircastle and Ontario Teacher's Pension Plan will sell the aircraft portfolio owned by joint venture Lancaster Aircraft Leasing.
The Stamford, CT-based lessor disclosed on an earnings call today that the the partners will liquidate the joint venture at the request of OTPP.
"Our controlling shareholder in that JV…when they look at the totality of their investment in this space they have made a very nice return on both sides of that equation and this is a decision by them to exit these assets in the context of reallocating their own capital into different sectors," Aircastle chief executive Mike Inglese told investors on the call today.
"The people who established this JV with us have since retired so with the change of personnel and the change in vertical mandates this is a logical progression for them," he added.
A 10K filing on 12 February shows that Aircastle owns 30%, while OTPP is the controlling partner with the remaining stake.
OTPP, once one of Aircastle's largest shareholders, divested its total stake in May 2018.
For accounting purposes, Aircastle will recognize an $8 million loss on its share of the undistributed losses related to the disposition of the portfolio. However, Aircastle expects to realize a 15% internal rate of return on the investments since the inception of the partnership, the company noted on the call.
Inglese confirmed today that the assets in Lancaster, which was established in 2013, will be sold to a third-party market because it "will offer them [the controlling partner] more value than we [Aircastle] probably would have".
Flight Fleets Analyzer shows that Aircastle and OTPP together own one Embraer 195 (MSN 19000585, two Airbus A330s (MSNs 1410, 1446), two Boeing 777-300s (MSNs 38887, 41523) and three Airbus A320s (MSNs 3729, 4019, 6722). All eight aircraft are in service, according to FFA.