Financing Acquisition of Overseas Aircraft Leasing Businesses by Japanese Companies Supporting Overseas M&A by Japanese Companies
International Business Development NR/2012-16
June 7, 2012
June 7, 2012
- The Japan Bank for International Cooperation (JBIC; Governor: Hiroshi Okuda) signed today a loan agreement totaling 3 billion U.S. dollars (JBIC portion) with RBS Aerospace Limited (RBSAI),*1 which is incorporated in the Republic of Ireland. This amount, required for the joint efforts of Sumitomo Mitsui Finance and Leasing Company, Limited (SMFL); Sumitomo Mitsui Banking Corporation (SMBC); and Sumitomo Corporation (SC) (hereinafter the "Three Japanese Companies"); is part of a total 7.3 billion U.S. dollars necessary for the acquisition of the aircraft leasing businesses (hereinafter the "Aircraft Leasing Businesses") under the Royal Bank of Scotland (RBS), a leading British bank. The loan is cofinanced with SMBC, which brings the total cofinancing amount to 5.06 billion U.S. dollars. Given that SMFL and SC indicated expectations for loans to fund their acquisition of equity stakes in the Aircraft Leasing Businesses, JBIC plans to sign loan agreements (413 million U.S. dollars and 78 million U.S. dollars, respectively) with each SMFL and SC.
- SMFL and SC jointly launched an overseas aircraft leasing business in 2008. This time, the Three Japanese Companies have jointly decided to acquire the Aircraft Leasing Businesses under RBS, which is one of the largest companies in this business (the 4th largest player in the world in terms of the value of its assets), with an aim to further strengthen competitiveness in this market.
- Along with the acquisition of RBSAI, the Three Japanese Companies also acquire aircraft leasing businesses in Great Britain and in Australia in this deal. With these moves, they intend to meet the increasing volume of air travellers on the back of the growth in emerging markets (especially in Asia), and the globally growing demand for commercial aircraft against the backdrop of emerging low-cost carriers (LCCs).
- JBIC will continue to support the overseas M&A activities of Japanese companies by drawing on its various financial facilities and schemes.