| SINGAPORE/NEW YORK, Sept 4
SINGAPORE/NEW YORK, Sept 4 Australia's Macquarie
Group Ltd and Japan's Orix Corp are among a
handful of companies exploring binding offers for the $5 billion
aircraft portfolio being sold by Dublin-based lessor Awas,
people familiar with the matter said.
Macquarie's aircraft leasing subsidiary Macquarie
AirFinance, and Orix Aviation, part of the Japanese financial
group, are set to compete against other Asian parties bidding
for the asset, including Cheung Kong Holdings Ltd,
which has previously confirmed its interest.
Other bidders include Hong Kong Aviation Capital, which is
owned by China's HNA Group and Bohai Leasing Co. Ltd
, and SMBC Aviation Capital - part of Sumitomo Mitsui
Financial Group Inc, according to the people familiar
with the matter.
Awas, one of the world's biggest aircraft lessors
and owned by British private equity firm Terra Firma, plans to
seek second-round bids in late September with the hope of
finalizing a deal by next month, the people said, asking not to
be named because the matter is not public.
The companies' interest underscores strong demand for
aircraft assets from Asian buyers, at a time when the region has
become the world's fastest-growing market as Asian airlines tap
into the spending power of travelers.
Representatives for Macquarie, Hong Kong Aviation Capital,
Orix, SMBC Aviation Capital and Terra Firma all declined
Cheung Kong, controlled by Asian tycoon Li Ka-shing, said
last month it had submitted a preliminary bid for the aircraft
Terra Firma has hired Goldman Sachs Group and
Deutsche Bank to explore exit options for Awas, which
has about 300 planes on lease to more than 100 airlines,
including Singapore Airlines Ltd and LATAM Airlines
The company is looking to sell newer aircraft for around $5
billion, while exploring an initial public offering for the
remaining portfolio of older planes that could be worth about $8
billion, Reuters reported in July.
Bidders are drawn to the sector's strong returns and that
the investment is secured against an underlying mobile asset,
people familiar with the process said. Access to cheap funding
and the potential for huge industry growth in Asia has driven
expansion plans of Asian companies.
New airlines coming up to meet growth in emerging markets
are increasingly looking to rent planes from the leasing
industry, which is currently estimated to have aircraft
portfolios worth $200 billion.
Asian players have muscled into the aircraft leasing
industry in recent years. Leasing arms of Industrial and
Commercial Bank of China, Bank of China,
and China Development Bank have already emerged as
significant global players.
Acquisitions by SMFG and Mitsubishi UFJ Financial Group Inc
have helped these groups also gain a global footprint.
In the process, they have taken on the world's two biggest
lessors, GECAS, a unit of General Electric Co, and
International Lease Finance Corp, now part of AerCap.
Another Dublin-based aircraft leasing firm that has been
exploring a sale, Avolon, has also attracted Asian interest.
China's sovereign wealth fund China Investment Corp, teamed up
with state-owned aerospace and defense company, Aviation
Industry Corporation of China, are in talks to buy Avolon,
Reuters previously reported.
Terra Firma bought Awas from Morgan Stanley in 2006
for $2.5 billion and a year later acquired rival Pegasus for
$5.2 billion, merging the groups to create the world's
third-largest plane lessor.
For Terra Firma, which is run by British financier Guy
Hands, Awas is one of its largest investments. CPPIB, the Canada
Pension Plan Investment Board, also owns a significant minority
(Additional reporting by Emi Emoto in Toyko; Editing by