CK Asset exits aircraft leasing business with $4.28 billion sale

CK Asset Holdings Ltd. said it’s exiting the aircraft-leasing sector due to a “paradigm shift” caused by the coronavirus pandemic, selling two indirect wholly-owned subsidiaries to Maverick Aviation Partnership LP for $4.28 billion.

The company is selling Accipiter Finance for about $2.44 billion and Manchester Aviation Finance for $1.84 billion, according to a filing to the Hong Kong stock exchange Friday. The first sale involves 74 aircraft and their leases and the second involves 51. Both also include planes on order.

The sales should realize a “satisfactory gain” of around $170 million, CK Asset said. Covid-19 has made the risk and return dynamics of aircraft leasing volatile and unpredictable, and the industry is seeing more consolidation and mergers and acquisitions to mitigate the volatility, it added. 

“The group considered it an opportune time to exit the aircraft-leasing sector and enhance its strategic focus during the pandemic,” it said.

Shares in CK Asset rose as much as 3.3% in early trade in Hong Kong, their biggest gain in a month.

CK Asset, founded by Hong Kong tycoon Li Ka-shing, said its aircraft-leasing business consists primarily of younger narrow-body aircraft and has generated steady returns since starting in 2014. 

Maverick Aviation is managed by Carlyle Group’s commercial aviation investment and servicing arm. Its primary investor is an affiliate of a unit of Canada Pension Plan Investment Board.