AviTrader_Weekly_Headline_News_2012-12-10

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AviTrader WEEKLY AVIATION HEADLINES 8 FINANCIAL NEWS Onex to acquire 50% stake in BBAM for $165m Onex Corporation agreed to acquire a 50% interest in BBAM, the world’s third largest manager of commercial jet aircraft, for $165m. The transaction is expected to close by the end of 2012 subject to certain conditions and approvals. Onex will acquire a 35% interest in BBAM from BBAM’s management team and a 15% interest in BBAM from FLY Leasing Limited, a leading global lessor of commercial jet aircraft managed by BBAM with 110 aircraft on long-term operating leases to 53 airlines in 29 countries. Onex and BBAM management will also invest a further $25m in newly issued shares of FLY at $11.41 per share. In total, FLY will receive approximately $75m in pre-tax gross proceeds from the sale of its interest in BBAM and the issuance of new FLY shares. SAS refinances three A330-300 aircraft Scandinavian Airlines System (SAS), the Scandinavian flag-carrier, entered into a $125.2m senior secured loan facility covering three A330-300 aircraft (s/n’s 496, 515 and 568) with an East Asia-based Global Insurance Company as sole facility provider. Tranches covering the two Aircraft have been drawn down as the initial ECA-backed loans matured, with the third and final tranche due in February 2013. The transaction was arranged by SkyWorks Leasing, LLC. Boeing forecasts sufficient financing for rising global aircraft deliveries Boeing projects the world’s airlines should see reasonable liquidity and pricing for new-aircraft delivery financing in 2013 even as jet builders ramp up production to meet demand, the manufacturer announced in London on December 4th, in issuing its fifth annual finance market Boeing headquarters in Chicago Boeing forecast. “We expect that despite economic and political challenges, global air travel will again demonstrate its remarkable resilience in 2013. The industry’s global growth and airlines’ fleet replacements, accelerated by higher fuel prices, should keep demand stable and attract sufficient financing,” said Kostya Zolotusky, managing director of capital markets development and leasing at Boeing Capital Corp., the plane maker’s financing and leasing unit which develops the forecast. The encouraging report comes amid lingering economic uncertainties and as higher costs for eligible airline borrowing using government export credit financing go into effect in 2013. The manufacturer forecasts total industry jetliner deliveries at $104bn in 2013, with 95% of that expected to be split between Boeing and Airbus. Boeing foresees 2013 financing conditions on par with 2012, and predicts the largest funding source – commercial banks – should strengthen their investment. Among other major players, capital markets are expected to grow as a funding source for U.S. airlines and expand to also serve non-U.S. airlines and leasing companies. Meanwhile, leasing firms are expected to grow in their delivery share and gain access to more diverse sources of equity and leverage. This year began amid concerns that Europe’s commercial banks, a primary aircraft financing source, would pull out of the market due to the continent’s economic crisis. However, Zolotusky said those fears did not materialize, and in 2013 the company expects that Europe’s banks will remain active because the aircraft space is one of the most attractive and high-performing sectors for bank investments. Boeing said regional commercial banks – in places like China, Japan, Australia, the Middle East and North America – stepped back into or entered aircraft financing in 2012 and expect to remain in 2013. In announcing the need for increased financing for rising industry deliveries, the company said market data clearly supports the higher production pace. MILITARY & DEFENCE U.S. Navy exercises contract option for 52 F414 engines The U.S. Navy exercised a 2013 contract option for the procurement of 52 GE F414 engines in support of the Navy’s planned procurement of F/A- 18E/F Super Hornets and EA-18G Growlers. This contract option follows the Navy’s decision to purchase 82 F414 engines earlier this year. Options for the Navy could increase the total buy to more than 200 engines through 2013. The contract, with all options, is valued at more than $800m. The F414 engine powers the U.S. Navy’s F/A-18E/F Super Hornet and EA- The F414 engine powers the Boeing EA-18G Growler (above) 18G Growler aircraft. More than 1,200 F414 engines totaling two million flight hours power more than 500 aircraft in the fleet. The F414 engine is rated at 22,000 pounds (98 kN) thrust and is in the 9:1 thrust-to-weight ratio class. Boeing Northrop Grumman’s aircraft systems repair facility achieves EASA certification Northrop Grumman Corporation’s (NOC) aircraft systems repair station in Rolling Meadows was granted Part 145 certification by the European Aviation Safety Agency (EASA). The company’s repair station was established to meet regulatory requirements for customers operating aircraft under civil aviation rules. Opened in 2009, the station services Northrop Grumman’s infrared countermeasures systems. December 10, 2012 / Vol. 368
AviTrader WEEKLY AVIATION HEADLINES 9 OTHER NEWS Atlas Composites partnered with ASC Process Systems, now with a UK office based in Poole, to upgrade its autoclave processes at its 25,000 ft² composites manufacturing facility. A five figure investment in plant sees Atlas Composites become ASC’s first UK customer to benefit from its CPC (Composite Processing Control) software and control systems retrofit, something which Atlas Composites MD Shaun Moloney is confident will provide added value to his customers. “Installing new CPC systems to Atlas Composites’ existing autoclaves will ensure our operators, and consequently our customers, have greater accuracy, reliability, and a greatly enhanced audit trail – all of which are key drivers for our growing aerospace customer base.” The CPC Autoclaves will be used to cure composite components for commercial and military aerospace, satellite communications, composites for motor sport and unmanned aerial systems components amongst others. ARINC is expanding its presence supporting airlines and airports in the Middle East, in parallel with its heightened business aviation activities and is well placed to take advantage of the massive growth expected in the region between now and 2020. ARINC is stepping up its presence at the New Doha International Airport (NDIA) where the first phase of systems are scheduled to be ready to support customer operations in early 2013. The NDIA project has become one of the largest airport construction projects globally and upon opening will place Doha amongst the top international hubs in the world. ARINC, together with partner Thales, was awarded the contract in 2007 to install the airport’s IT, security and telecommunication systems inside the main terminal buildings and more than 100 supporting facilities buildings. ARINC also recently secured a five-year contract renewal with dnata at Dubai International Airport for an upgrade from iMUSE to vMUSE. The contract includes the delivery of CUPPS and CUSS platforms using the latest virtualised technology and providing the ability to work from remote sites from the Emirates Group Data Centres. ARINC has offices in Dubai, Cairo, Doha, and Saudi Arabia. EADS governance and shareholding structure receives far-reaching overhaul The EADS Board of Directors and the company’s core shareholders agreed on a far-reaching change of the company’s shareholding structure and governance. The agreement aims at normalising and simplifying the governance of EADS while securing a shareholding structure that allows France, Germany and Spain to protect their legitimate strategic interests. Subject to customary regulatory conditions and to Germany (through Kreditanstalt für Wiederaufbau (KfW), the investment arm of the German State) acquiring an initial block of 5 percent of EADS, an Extraordinary General Meeting of shareholders will be held during the first half of 2013, to vote on the proposed changes to the company’s Articles of Association, on the proposed share buy-back and to elect new directors. Key elements of the agreement are: • France and Germany intend to build equal ownership positions, while the present core industrial shareholders, Daimler AG and Lagardère SCA, are provided with a path to partially divest and will eventually be free to trade their shares at their discretion. • Subject to the vote of the Extraordinary General Meeting of the shareholders of EADS, the present shareholder pact, called “Participation Agreement”, in place since the company’s foundation in 2000, will be terminated and replaced by a new, limited arrangement between the French, German and Spanish Governments. • France, Germany and Spain have agreed on a capped government shareholding (approximately 12 plus 12 plus 4 percent). The three states will have reciprocal pre-emption rights. The amended Articles of Association of EADS will contain an ownership and voting restriction from crossing the 15 percent threshold by shareholder individually or collectively. • The three States have agreed that, upon the request of any of them, they would vote against a future change to a limited number of the new governance provisions. • The future EADS Board will comprise 12 members, proposed by the Remuneration and Nomination Committee, including a Chairman, a Chief Executive Officer and at least 8 independent Non-Executive Directors. The majority of Directors as well as two thirds of the members of the Executive Committee will be EU nationals. • Certain specific French and German national security interests will be protected through the creation of “national defence companies” holding sensitive military assets, and including the rights of France and Germany to consent to three outside directors to the board of their respective “national defence companies”. Two of such directors of each “national defence company” shall be members of the EADS Board. • Under the new governance scheme, no veto right will be given to any group of Directors in the Board or to any shareholder at the Shareholders’ Meeting The fifty year successful cooperation between Avio-Diepen and Switlik, a manufacturer of the highest quality sewn and heat sealed inflatable safety and survival products, reached a new step as Switlik appointed Avio-Diepen as its exclusive distributor for the entire region of Asia Pacific. Avio-Diepen, already the Authorized distributor for the EMEA region and parts of Asia will, with this extension The far-reaching overhaul of EADS shareholding and governance will simplify procedures EADS December 10, 2012 / Vol. 368
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