GATX to exit aircraft leasing business
GATX Corp., a major leasing and financing company for marine, rail and air transport operators, said Thursday it has agreed to sell the majority of its aircraft leasing business to a consortium of investors, resulting in a net gain of about $500 million.
The buyers are led by Australia’s Macquarie Bank, and include Och Ziff Capital Management Group. GATX said the transaction is expected to close by the end of the year.
The consortium, known as Macquarie Aircraft Leasing Ltd. (MALL), will acquire aircraft wholly owned by GATX and negotiate to acquire the remaining assets controlled by aircraft leasing joint ventures managed by GATX. The Chicago-based company said it expects the majority of its employees in the aircraft leasing business will transfer to Macquarie Aircraft Leasing.
The total book value of the air assets involved in the deal, including those in joint ventures, is about $1.5 billion, or 21 percent of GATX’s asset portfolio.
After special charges and taxes, GATX expects to net about $500 million from the transaction.
“We believe that the sale of this platform to MALL will enable GATX to realize greater value for our shareholders than we could realize from continuing to own the business, and will position GATX to pursue opportunities in our higher return rail and specialty businesses,” said Brian Kenney, chief executive officer, in a statement.
GATX began paring the size of its air portfolio late last year to rid itself of older, less profitable aircraft worth about $450 million. On Aug. 31, the company announced the sale of up to 27 aircraft to AerCap Group, another leasing company.
GATX owns one of the world’s largest railcar fleets and has been able to institute double-digit increases in lease rates as demand for freight rail service has boomed the past couple of years.
The acquisition is the latest example of investment in the logistics, transport and transport infrastructure sectors by banks, investment funds and private equity groups.