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Kuwait-based aircraft lessor Alafco Aviation Lease & Finance Co. (Alafco) has executed a framework agreement under which an order for 20 Boeing 737 Max 8 jets would be transferred to Macquarie AirFinance, potentially paving the way for a $2.2 billion acquisition by the Australian aircraft leasing firm.
Alafco, which is backed by the Kuwaiti government, said it has completed the novation of the Boeing order book to Macquarie AirFinance by executing the agreement in respect of the Max purchase agreement dated October 2012, according to a regulatory disclosure on Wednesday on the Kuwait stock exchange where it is listed. Its shares are trading 2% higher at 204 Kuwaiti fils on Wednesday morning.
In a separate statement, Macquarie Asset Management, PGGM Infrastructure Fund and Australian Retirement Trust who together own Macquarie AirFinance, said they would support the $2.2 billion acquisition of Alafco's aircraft portfolio. The transaction will be supported with a $1.65 billion acquisition facility, underwritten by BNP Paribas, Citibank, MUFG Bank, and Natixis, it added.
Jonathan Watkinson-Hall, Head of Asset Finance at Macquarie Asset Management, said: “This strategic acquisition will enable Macquarie AirFinance to grow its network of customers globally while increasing its exposure to more efficient aircraft."
Alafco's shareholders approved the transaction on 27 December 2022. The deal is expected to be completed during 2023, following the satisfaction of customary closing conditions, the statement said.
Alafco has a portfolio of 77 Boeing and Airbus aircraft, with another 68 on order. It has lease agreements with carriers including Air India, British Airways and Malaysia Airlines, according to its website. The company’s shareholders include Kuwait Finance House KSCP, Gulf Investment Corp. and Kuwait Airways Co.
(Reporting by Brinda Darasha; editing by Seban Scaria)
