StanChart to sell jet leasing arm to Saudi wealth fund unit for $3.6 bln

Standard Chartered (STAN.L) said on Monday it was selling its global aviation finance leasing business to Saudi Arabia-based AviLease for about $3.6 billion, as part of a drive to streamline its operations.

AviLease will pay an initial consideration of $700 million and is also funding repayment of $2.9 billion of net intra-group financing from the StanChart group, bringing the total consideration to about $3.6 billion.

The deal comes at a time when the bank is focussing on business areas where it stands out from competitors as it strives to deliver 2024 targets.

Riyadh-headquartered AviLease, also known as Aircraft Leasing Co, is a jet lessor owned by Saudi Arabia’s sovereign wealth fund.

StanChart said in January it was exploring options for its global aviation finance business.

Dublin-based Standard Chartered Aviation Finance owns and manages more than 120 aircraft and offers services including jet fuel hedging, debt financing and remarketing of unneeded planes.

“The sale of our Aviation Finance leasing allows us to continue to focus our efforts on those areas where we are most differentiated,” Simon Cooper, CEO of Corporate, Commercial & Institutional Banking and Europe & Americas at Standard Chartered, said on Monday.

The company expects to record a gain of around $300 million from the sale and its common equity tier 1 capital ratio would increase by around 19 basis points.

This report’s information was first seen on REUTERS; to read more, click this link.