* Goldman Sachs and Deutsche Bank hired for strategic review
* Options include stock market listing or sale
* Awas has book value of $8.6 billion, peers trade at 1
(Adds book value)
By Anjuli Davies and Arno Schuetze
LONDON/FRANKFURT, April 1 British private equity
firm Terra Firma has appointed Goldman Sachs
and Deutsche Bank to advise it on what to do with
aircraft leasing firm Awas, with possible options
including a potential stock market listing or complete sale,
three people familiar with the matter said.
Listed peers like Air Lease, Aircastle or Aercap trade at an
average of one times their book value. Awas's book value stood
at $8.6 billion as of May 2013.
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, making it a much larger force in the market, which
has boomed in the last year or so as airlines look to build up
fleets quickly to meet resurgent travel demand.
Any potential IPO is expected to take place as early as the
second half of the year, one of the sources said.
"The strategic review will take some months. Options include
IPO, outright sale, partial sale or do nothing," a second source
familiar with the matter said.
In a separate strategic review, Terra Firma had asked JP
Morgan and Goldman Sachs to look into its options for its cinema
chain Odeon & UCI, but in September 2013 decided against
floating the company.
Terra Firma, CPPIB, Goldman Sachs and Deutsche Bank declined
Aviation assets have begun attracting the interest of
longer-term investors such as insurers and pension funds hungry
for better returns while interest rates remain low.
Dublin-based aircraft lessor Avolon is also preparing for an
initial public offering this year two people familiar with the
matter told Reuters in March.
Aircraft leasing firms dwarf airlines in terms of fleet size
and are the biggest and most important customers for planemakers
like Boeing and Airbus.
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
Recently sources familiar with the matter said Terra Firma
was planning to launch a new 2 billion-euro fund concentrating
on smaller buyouts.
Awas is leasing its 263 aircraft to airlines in 46
countries, making a net profit of $162 million on revenue of $1
billion in its 2012 fiscal year.
(Reporting by Anjuli Davies and Arno Schuetze; Editing by Greg
Mahlich and William Hardy)