B&B Air Takes Stake In Management Firm, Eyes Acquisitions
03 April 2010 - 3:37AM
Dow Jones News
Babcock & Brown Air Ltd. (FLY) will look at acquiring
"chunks" of aircraft leasing portfolios after announcing plans
Friday to take a stake in the company that manages its fleet.
The Dublin-based company, known as B&B Air, is taking a 15%
stake in the privately-owned firm that runs its fleet of 62
commercial aircraft as part of a management buyout of the business,
which had long been seen as a takeover candidate.
The fleet-management company, to be renamed BBAM LP, will also
raise its stake in B&B Air to 9.9% from 6.6%.
NYSE-listed B&B Air is led by Chief Executive Colm
Barrington, an industry veteran who is also non-executive chairman
of Ryanair Holdings PLC (RYA.DB, RYAAY), the discount airline.
The twin moves end uncertainty over the future of the
fleet-management business, which also oversees another 230 aircraft
on behalf of investors.
It is being acquired from Babcock & Brown Group, the
bankrupt Australian finance and advisory company, but had long been
seen as a target of Japan's Nomura Co. Ltd., according to people
familiar with the situation.
The aircraft leasing market has been in a state of flux as the
financial parents of some of the largest operators--including
American International Group Inc. (AIG), CIT Group Inc. (CIT) and
Royal Bank of Scotland Group PLC (RBS.LN)--considered selling their
operations.
The aircraft-management firm is headed by B&B Air Chairman
Steve Zissis. His team is taking an 85% stake in BBAM LP and paying
an average of $8.78 a share to boost their holding in the
NYSE-listed B&B Air. Its shares closed Thursday at $10.35,
having listed in September 2007 at $23.
B&B Air spokesman Matt Dalton said the company was a
potential acquirer of aircraft. "We would not be opposed [to
buying] chunks of portfolios," he said.
-By Doug Cameron, Dow Jones Newswires; 312-750-4135;
doug.cameron@dowjones.com
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