Thursday, January 7, 2010

Allco Aircraft Leasing sale finally takes off!

THE receivers of Allco Finance have finally completed the sale of its key aircraft leasing business — eight months after the deal was signed.

The sale of the business to China's HNA Group, a state-owned transport and logistics company, was announced in May but has been held up waiting for the consent of 29 non-recourse lenders, which between them have $3 billion tied up in the Allco fleet.

Allco's receiver, Peter Gothard of Ferrier Hodgson, said handing over the keys to the aircraft-leasing business was a big step towards the completion of the failed financier's receivership.

"It has taken a little longer than expected," he said. "[But] we knew it was going to be difficult."
He declined to disclose the sale price, but in 2008 Allco put a net value of $86 million on the business, whose customers include Qantas, Emirates, Singapore Airlines, Ryanair and Asiana.
Mr Gothard said completion of the sale was made "a little more thorny" by legal action late last year against former Allco chief David Veal and Geoffrey Kinghorn, son of Allco's founder, John Kinghorn. The action was aimed at restraining the pair from appointing as manager of special-purpose vehicles any entity in which the Kinghorns or Mr Veal had a financial interest.

The legal action is due to resume next month in the Federal and Supreme courts.
HNA's adviser, Bravia Capital, said it had been an "extremely difficult transaction" to formalise.

The Chinese company's off-shoots include Hainan Airlines, the largest private airline in China, part-owned by US billionaire George Soros. It also has stakes in Hong Kong Airlines and Hong Kong Express.

The sale leaves Allco's debtor-finance business as the last tradeable business for the receiver to offload.

Its shipping business, Allocean, which has a fleet of 38 vessels — tankers and container ships — was sold to a Greek shipping company last year for an undisclosed price. The troubled state of the shipping industry made the sale difficult.

Allco's rail-leasing assets in North America and office equipment-leasing business were sold early last year.

Source ‘The Age’ Syndey.

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