Chinese tycoon to buy Irish plane lessor for roughly $2.8b

Henry Cheng Photographer: Brent Lewin/Bloomberg

Hong Kong billionaire Henry Cheng’s jewelry-to-property business empire will acquire Dublin-based Sky Leasing for about $2.8 billion, including debt, to bolster the group’s aviation business.

Though the Cheng family’s Goshawk Aviation Ltd. announced the deal last month, it didn’t disclose the value at the time. Of the total, 70 percent of the purchase will be funded with debt and the rest from Goshawk parents Chow Tai Fook Enterprises Ltd. and NWS Holdings Ltd., Brian Cheng, one of the patriarch’s sons and an executive director at NWS, said in an interview.

“The growth driver will be aircraft leasing in the next five years,” the younger Cheng said at his office in the city last week. “The good thing is our fleet is young and liquid. It’s like a wet market where you can easily sell. There’s always demand there.”

NWS and Chow Tai Fook are the latest to join a slew of companies in Asia to bet on aircraft leasing as a travel boom in the region fuels demand for planes from airlines, many of whom prefer renting rather than purchase to help cap cost of ownership. Four firms with links to Chinese owners rank among the world’s top 12 lessors, the top one being HNA Group Co.’s Avolon Holdings Ltd. at No. 3.

Goshawk said June 21 that it agreed to buy the unit of Sky Aviation Leasing International LP from the Public Sector Pension Investment Board, one of Canada’s largest pension investment managers, and private-equity firm ATL Partners.

The transaction, subject to approvals, will add 51 aircraft to its fleet of about 130, according to Goshawk’s website. Goshawk is in the process of getting a credit rating to help access cheaper funds, after which an initial public offering would be the next step, Cheng said.

Leased airplanes account for about 42 percent of the world’s fleet, according to Flight Ascend Consultancy. Europe and Asia Pacific each hold about 30 percent of the world’s leased fleet.

Sky Leasing’s young and much sought-after narrow-body aircraft is the segment the group is focusing on, said Cheng. After the deal, the average fleet age of the combined portfolio would be three years, compared with the average remaining lease term of close to eight years.

Cheng’s father ranks as Hong Kong’s fourth-richest man, with a net worth of $15.7 billion, according to the Bloomberg Billionaires Index. Hong Kong-listed NWS is a subsidiary of New World Development Co., the family’s main property, hotels and infrastructure company. NWS’s Fortland Ventures is the largest single shareholder of Hong Kong-listed Beijing Capital International Airport Co., according to data compiled by Bloomberg.

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Bloomberg

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.