Standard Chartered sells aviation leasing finance business for $700m

AviLease will also fund the repayment of US$2.9b of net intra-group financing.

Standard Chartered has sold its global aviation finance leasing business to Saudi-Arabia headquartered AviLease for US$0.7b.

The bank’s aviation finance business owns and manages a modern fleet portfolio of over 120 aircraft, leasing to over 30 airlines globally. In 2022, the business recorded a profit after tax of US$15.6m, gross assets of US$3.8b, and a net asset value of US$300m.

Launched in 2022, AviLease—owned by Saudi Arabia’s sovereign wealth fund Public Investment Fund—offers leasing, trading, and asset management services.

The sale is expected to be completed by end-2023, with Standard Chartered expecting to gain US$300m.

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The transaction includes the sale of 100% shareholding in each of Pembroke Group Limited (Isle of Man), Pembroke Aircraft Leasing Holdings Limited (Ireland) and Pembroke Aircraft Leasing (Tianjin) Limited (China). Upon completion of the sale these companies will no longer be subsidiaries of Standard Chartered.

AviLease is also funding the repayment of approximately US$2.9b of net intra-group financing from the Standard Chartered Group.  The loan is subject to adjustment with reference to the amount due at completion.

In a statement announcing the sale, Simon Cooper, StanChart CEO of corporate, commercial & institutional banking in Europe & Americas, thanked their aviation finance colleagues for its 15 years of service to the bank.

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“The sale of our Aviation Finance leasing allows us to continue to focus our efforts on those areas where we are most differentiated and to further progress our Return on Tangible Equity journey,” Cooper said.