Korea Transport Asset Management (KOTAM) is in pole position to acquire AirAsia's leasing arm Asia Aviation Capital for roughly $900 million, Reuters has reported.

Regardless of whether such a deal materialises, Asia Aviation Capital is on the face of it a strange acquisition target for KOTAM, which is part of shipping company Kukje Maritime Investment.

Firstly, it would buck a trend. Korean investment into aviation has so far focused on widebodies. That is the strategy of new Korean lessor Crianza Aviation, for example.

The Asia Aviation Capital platform, however, has no exposure to any aircraft beyond the Airbus A320 family.

Secondly, the platform as it stands offers little credit diversification. In essence, it is AirAsia's captive lessor. Apart from leasing jets to that low-cost carrier, Asia Aviation Capital just has three A320s leased to GX Airlines, two to Lucky Air, and one to West Air, Flight Fleets Analyzer shows.

An industry source has told FlightGlobal that in their opinion a new lessor looking to build a portfolio solely composed of Airbus A320s with essentially one customer would stand little chance of being able to raise debt or equity from commercial banks, given the concentration risk.

But while it does currently have asset and credit concentration risk, Asia Aviation Capital has made noises about wanting to change that.

"Our aim is to become a fully fledged global lessor. That's quite clearly our strategy at the moment, so we will be diversifying our risk from a credit perspective and in airlines, and also from an asset perspective," said finance chief Simon Perkins at November 2016's Airline Economics Growth Frontiers conference in Hong Kong.

"Doing this means trading and making purchases in the secondary market, and we will bid in the sale-and-leaseback market as well," he added.

Diversifying the risk profile is a sensible strategy for Asia Aviation Capital, one that makes it a more appealing acquisition – as does the hiring of industry stalwarts such as Perkins and the lessor's new chief, GECAS veteran Stephane Daillencourt.

But why would KOTAM, for what appears to be its first serious foray into aviation, want to invest in a platform that has to undergo such a transition?

Why invest $900 million in acquiring such a platform when that money could also build a diversified portfolio from scratch or through a tie-in with one of the numerous advisory firms already active in aircraft leasing? Indeed, KOTAM could simply lend into aviation via a platform such as Crianza, which is looking to attract Korean money across the risk spectrum.

KOTAM may be taking the view of many international lessors that narrowbodies are easier to place than widebodies, and that the exposure to A320s is therefore not such a concern given that Asia Aviation Capital has already said it is looking to diversify its portfolio.

Additionally, KOTAM – which reportedly has Korea Development Bank lined up to provide financing – may see Asia Aviation Capital as a ready-made platform that, with investment, can be transformed into a fully fledged lessor quickly.

Crucially, the fact that it is up and running may assuage the concerns that come with starting from scratch. Hiring the right people to run the business and identifying a portfolio of aircraft for acquisition would delay KOTAM's entrance into aviation.

There is a cynical Wall Street tradition to deploy the phrase "dumb money" whenever an improbable deal is floated. But it may simply be that news of an unlikely bidder for Asia Aviation Capital has been leaked to persuade Chinese bidders to finalise their pitches before that nation's government tightens regulation of offshore investments.

Source: Cirium Dashboard