Despite the uncertainty that the sale of the European communication infrastructure business worth 10 billion euros is being investigated by the British competition and market authority, the covid-19 pneumonia epidemic has enveloped the world, and the disposal of assets by Li Ka Shing and his family's listed companies, once known as "Superman", has not stopped.
After the European communication infrastructure business, the aircraft leasing business is put on the shelf. Recently, Changjiang industrial group (1113.hk, hereinafter referred to as "Changshi group"), an important listed company platform of Li Ka Shing family, announced that it would sell the company's aircraft leasing business at a price of US $4.281 billion. According to the information learned by the reporter, the buyer of this transaction is maverick aviation partnership LP (hereinafter referred to as "maverick"), an aviation investment platform under Carlyle, an American investment institution.
The aircraft leasing business of Changshi group is mainly located in two companies: Accipiter finance s. R.L。 (hereinafter referred to as "Accipiter") and Manchester aviation finance s. R.L。 (hereinafter referred to as "MAF"). According to the transaction framework concluded by both parties, the aircraft sold by Changshi group include not only the existing aircraft of Accipiter and MAF, but also the aircraft that have been ordered but have not been delivered. This means that the Li Ka Shing family has completely cleared its aircraft leasing business.
A senior investment manager of a Hong Kong investment bank told reporters that Carlyle Group, the buyer of this transaction, is an institution engaged in alternative investment. Its aviation investment platform Maverick is actually an investment fund, behind which there are many large institutions LP (financial investors), of which the most important LP is Canada's pension fund.
The aircraft leasing industry was once a promising industry for the Li Ka Shing family. In fact, the two aircraft leasing companies in this transaction were invested and restructured by the Li Ka Shing family. Its earliest involvement in aviation leasing business can be traced back to 2014. At that time, the focus of Li Ka Shing family's investment strategy was adjusted and transferred from emerging country markets to traditional economically developed country markets. It was at that time that Li Ka Shing family took the aviation leasing industry as a new investment focus.
"In 2014, the Li Ka Shing family entered the field of aviation leasing through cooperation with Mitsubishi commercial of Japan." A senior person in the civil aviation industry recalled to our reporter. At that time, the listed company Changjiang industry and Mitsubishi commercial established a joint venture. The former invested 60% and the latter invested 40% through its subsidiaries. After the establishment of the joint venture, it invested in the purchase of aircraft. The purchase of the first batch of aircraft cost US $800 million to take over 15 aircraft from Mitsubishi commercial. Since then, it has funded the purchase of new aircraft.
The investment manager of the above-mentioned Hong Kong investment bank said that in Hong Kong, one of Li Ka Shing's well-known investment habits is to invest in industries and enterprises that have produced stable investment returns in 7-10 years. At that time, the aviation leasing industry was just in line with this logic. Therefore, Li Ka Shing family invested a lot of money to buy aircraft around the world, Or negotiate the acquisition of aviation leasing enterprises with the same type of business.
While the Li Ka Shing family has increased its investment in the aviation leasing industry, its partner Mitsubishi commercial is gradually withdrawing from the industry. Therefore, the proportion of listed companies of the Li Ka Shing family in the joint venture has been increasing, reaching 90%, and the other 10% of the shares are held by the Li Ka Shing Foundation. In the same period, the Li Ka Shing family reorganized its related listed companies due to the transfer of investment focus, and Changshi group became a platform focusing on real estate business.
As an industry that can provide stable cash flow, aviation leasing business is placed in Changshi group. The investment manager of the aforementioned Hong Kong Institution said that at that time, it was regarded as a practice to optimize the asset structure of Changshi group. "Because the financial situation of Changshi group was very good at that time, but the assets were all properties, and the land price was very fierce at that time, from the perspective of stabilizing the asset structure of long-term income, the aviation leasing industry was placed in Changshi group, making the development of Changshi group more sustainable." He said.
After being incorporated into the Changshi group, the Li Ka Shing family reorganized its aviation leasing business, and all businesses were attributed to amck aviation Holdings (hereinafter referred to as "amck"). This enterprise is located in Dublin, which is the capital of Ireland, and Ireland has been one of the important "tax depressions" in the world for a long time, A large number of multinational companies are registered there to enjoy lower tax rates.
"This transaction has a relatively distinctive trading style of the Li Ka Shing family." Another investment manager of a Hong Kong investment institution analyzed to reporters, that is, don't wait for the company to lose money before disposing of assets, so the company's value will be greatly reduced. According to the financial data of Changshi group, the net profit after tax of the two aircraft leasing companies sold this time is US $91 million in 2019 and US $62 million in 2020. "In other words, when selling the company, the company still has a good profit level, so that it can have a good trading price." He said.
However, he stressed to reporters that the more critical thing is the trend. Compared with the after tax net profit of US $91 million in 2019, the net profit of US $62 million in 2020 has decreased significantly. "The main reason is the epidemic, and the impact of the epidemic on the aviation industry continues. Then, when the trend appears, deal with assets decisively. This is the investment style of the Li Ka Shing family and does not earn the last copper." He said.
Changshi group said in the announcement of disclosing transaction information: "the covid-19 pneumonia epidemic has led to a change in the outlook of the aircraft leasing industry, and the dynamics of risk and return have become unstable and difficult to predict." The market gave positive feedback on the role of the transaction in Changshi group. After the disclosure of the transaction announcement, the share price of Changshi group rose.
"The asset structure of the two aircraft leasing companies sold by Changshi group is still good. There are many narrow body airliners. Under the restrictive impact of the global covid-19 pneumonia epidemic on international travel, the demand for narrow body airliners mainly used for flying in China is still relatively strong." The aforementioned Chinese civil aviation industry told reporters that this is also one of the reasons why this transaction can sell at a satisfactory price.
Recently, the Li Ka Shing family has put a number of its assets on the shelf. In addition to the aviation leasing business that has been concluded this time, it also includes the Li Ka Shing family's communication infrastructure business in Europe. It is a larger transaction. If it is finally formed, its transaction amount may reach about 10 billion euros, and its counterparty, Is a telecommunications enterprise headquartered in Spain.
However, the deal is in trouble. CMA is investigating the possible fair competition and discriminatory treatment of consumers caused by this transaction. CMA is actually the UK antitrust regulatory authority. There is still great uncertainty about the final result of this transaction.
(China business daily)
