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Monday 08 October, 2018

Sirius Aircraft L.F.

Intention to Float

RNS Number : 2042D
Sirius Aircraft Leasing Fund Ltd
08 October 2018
 

NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, DIRECTLY OR INDIRECTLY, IN OR TO THE UNITED STATES, CANADA, AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA, JAPAN OR ANY MEMBER STATE OF THE EEA (OTHER THAN THE UNITED KINGDOM) OR ANY OTHER JURISDICTION IN WHICH THE PUBLICATION, DISTRIBUTION OR RELEASE OF THIS ANNOUNCEMENT WOULD BE UNLAWFUL.

This announcement is an advertisement and does not constitute a prospectus and investors must subscribe for or purchase any shares referred to in this announcement only on the basis of information contained in a prospectus to be published by Sirius Aircraft Leasing Fund Limited (the "Company") in due course (the "Prospectus") and not in reliance on this announcement. When made generally available, copies of the Prospectus may, subject to any applicable law, be obtained from the registered office of the Company and will be made available for viewing at the National Storage Mechanism at http://www.morningstar.co.uk/uk/nsm. This announcement does not constitute, and may not be construed as, an offer to sell or an invitation to purchase, investments of any description, or a recommendation regarding the issue or the provision of investment advice by any party.

Sirius Aircraft Leasing Fund Limited

Intention to Float on London Stock Exchange

Proposed Initial Public Offering targeting a raise of US$250 million for investment primarily in used, single-aisle aircraft assets

8 October 2018: Sirius Aircraft Leasing Fund Limited (the "Company"), a newly established Guernsey investment company, today announces its intention to launch an initial public offering ("IPO"). The Company is targeting a raise of US$250 million via an initial placing and offer for subscription (together the "Issue") of ordinary shares. The Company is also launching a twelve month placing programme in respect of up to a further 300 million ordinary shares and/or C shares (the "Placing Programme").

Application will be made for the ordinary shares issued in connection with the Issue to be admitted to the premium segment of the Official List of the UK Listing Authority and to trading on the premium segment of the London Stock Exchange's main market ("First Admission"). The Company's investment adviser will be Sirius Aviation Capital Holdings Limited ("SACHL" or the "Investment Adviser").

The Company

Investment objective: The Company's investment objective is to provide investors with an attractive level of regular income and capital returns through investing primarily in used, single-aisle aircraft.

Portfolio construction: The Company will look to invest in portfolios of attractively valued used single-aisle aircraft with leases in place to globally diversified airlines. The Investment Adviser's well established market contacts allow for access to an attractive pipeline of aircraft portfolios. The Company will seek to use gearing to enhance equity returns with expected gearing of ca. 50% of the total assets under management.

Target return: The Company will target an annualised dividend yield of 8% (on the issue price of US$1.00 per ordinary share) once fully invested, and a total return target of an IRR of 10% per annum (on the Issue Price of US$1.00 per ordinary share) over the long term. The Company intends to pay dividends on a quarterly basis.

Investment Adviser: SACHL will act as investment adviser to the Company. The investment advisory team will be led by Howard Millar, former deputy CEO of Ryanair Holdings. Howard spent 23 years at Ryanair and currently sits on its Board as a Non-Executive Director. Howard will be supported by a team with extensive industry experience and global contacts. Patrick O'Brien former Senior Tax Partner at KPMG Ireland and global industry leader, will be joining SACHL as Non-Executive Director and Chairman of the Board.

Fee structure: The Investment Adviser will be entitled to an investment advisory fee of 1.0% per annum of the prevailing net asset value. There will also be a performance fee of 15% of returns in excess of 10% per annum subject to a high watermark. 50% of the performance fee will be payable in shares, which will be subject to a one year lock-up.

Market opportunity

SACHL believes that an attractive opportunity exists in terms of the acquisition, lease and sale of used aircraft due to positive supply and demand dynamics:

 

·     Steady supply of assets - there is a liquid market for single-aisle, used aircraft as traditional lessors need to dispose of older aircraft to, inter alia, maintain the average age profile of their fleets. This leads to a steady supply of suitably diverse portfolios in terms of lessees and lease maturities from this source. For example, the major publicly quoted lessors have announced that they have sold in excess of 300 aircraft in 2017 for aggregate value of c. US$8 billion;

 

·     Demand - for lessees there can be significant cost savings in leasing used single-aisle aircraft compared to new aircraft. The growing demand for used aircraft has contributed to a liquid secondary leasing market with large airline operators such as International Airlines Group and Deutsche Lufthansa AG active operators of these older aircraft;

 

·     Engine Values Underpin Future Aircraft Values - engine manufacturers have de facto monopoly on spare parts and increase prices annually which in turn underpins the value of the engines and the associated aircraft types; and

 

·     Maintenance Profits - the effective management of the aircraft maintenance compensation relating to the maintenance condition of the airframe and engines can deliver enhanced returns.

 

Howard Millar, CEO of the Investment Adviser commented:

"We are pleased to announce our intention to launch the IPO of the Sirius Aircraft Leasing Fund. The fund will invest in used single aisle aircraft to target an attractive dividend yield of 8 per cent. per annum with the potential for capital upside. The senior management team of the investment adviser have in excess of 80 years' experience in aviation and have outstanding capability and contacts in this industry. Globally we intend to leverage this capability to access portfolios of in demand single aisle aircraft (with leases attached), principally from lessors disposing of older aircraft in order to maintain the average age of their fleet. We are currently assessing a number of attractive portfolios and anticipate that the funds raised will be deployed within 6 months of Admission."

 

The Issue

Liberum Capital Limited ("Liberum") is acting as Sponsor, Joint Financial Adviser and Joint Placing Agent in relation to the Issue, and working alongside J&E Davy ("Davy") as Joint Financial Adviser and Joint Placing Agent.

Further details relating to the Issue will be set out in the Company's prospectus, currently expected to be published in late October.

The value of shares and the income from them is not guaranteed and can fall as well as rise due to stock market and currency movements. When you sell your investment you may get back less than you originally invested.

Neither the content of the website of the Company, nor the content on any website accessible from hyperlinks on its website for any other website, is incorporated into, or forms part of, this announcement nor, unless previously published by means of a recognised information service, should any such content be relied upon in reaching a decision as to whether or not to acquire, continue to hold, or dispose of, securities in the Company.

Expected timetable

Publication of Prospectus - Late October

Admission and dealings - Early November

-ENDS-

 

Notes to editors

Media contacts:

Teneo Strategy | +353 1 6614055

Conor Brophy, Brendan Murphy

Sponsor, Joint Financial Adviser and Joint Placing Agent:

Liberum Capital Limited | +4420 3100 2000

Gillian Martin, Andrew Davies

Joint Financial Adviser and Joint Placing Agent:

J&E Davy | : +353 1 679 7788

Brian Garrahy, Niall Jones

Investment Adviser team biographies:

Howard Millar is the Chief Executive of Sirius Aviation Capital Holdings Limited. The main part of Howard's career was spent at Ryanair Holdings plc where he was latterly Deputy Chief Executive and Chief Financial Officer (until 2014) having spent 23 years at the company. Howard continues to be on the board of directors of Ryanair as a Non-Executive Director and also serves as Chairman of the Remuneration Committee. Howard also sits on the advisory board of Irelandia Aviation, a private company which owns two airlines in South America - Viva Colombia and Viva Peru. Howard was appointed the Chairman of BDO Chartered Accountants (Ireland) in March 2015 and is also a board member of ASL Airlines, a Dublin based private company that operates 140 aircraft globally in its cargo and contract leasing business, and operates Fly Safair, a low cost airline in South Africa. Prior to joining the Investment Adviser he was Group Chief Operating Officer of the Stellwagen Group and Chief Executive of Stellwagen Capital. Howard graduated from Trinity College, Dublin and was awarded a BSc Mgnt (Hons) and is a Fellow of the Institute of Chartered Certified Accountants.

Edward Coughlan is the Chief Commercial Officer of Sirius Aviation Capital Holdings Limited. Prior to co-founding Sirius Aviation Capital Holdings Limited, Edward held the position of Chief Commercial Officer of Seraph Aviation Management (part of the Stellwagen Group) which managed a portfolio of aircraft leased globally valued at US$1.5 billion for four different investors including two U.S. investment funds, a German KG fund and a Chinese aviation leasing company. From 2009 to 2015, Edward held the role of Senior Vice President of Marketing and served on the board at Volito Aviation an aircraft leasing company based in Dublin, which was a joint venture between the Volito Group and Goldman Sachs that owned and managed a portfolio of forty used single-aisle aircraft.

From 2005 to 2009, Edward was director of leasing at Aero Turbine, an aircraft engine leasing company wholly owned by AerCap, and was responsible for engine leasing and trading covering Europe, the Middle East and Asia. Edward trained as an aircraft maintenance engineer at Lufthansa Technic and has held numerous engineering roles at Air Atlanta Aero Engineering. Edward has a certificate in Aeronautical Engineering from University of Limerick and a Diploma in Business Studies from University College Cork.

Edward Hansom is the Chief Investment Officer of Sirius Aviation Capital Holdings Limited. Before joining Sirius Aviation Capital Holdings Limited he was Chief Investment Officer for Seraph Aviation Management (part of the Stellwagen Group) from 2014 to 2017 where he focussed on developing aircraft investment strategies and risk management systems. From 2002 to 2014 he worked as an independent aircraft finance consultant specialising in business strategy, capital markets and risk management. From 1988 to 2002 Edward worked for GPA Group (subsequently AerFi), one of the world's largest aircraft lessors until the early 1990s, from 1997 as Chief Financial Officer. Prior to 1988, Edward worked in London and Paris for Bank of Nova Scotia in corporate banking, credit analysis and treasury departments, and interest rate derivatives at Schroders. He is a graduate of Magdalen College, Oxford and the Manchester Business School.

Kieran Ryan is the Chief Financial Officer of Sirius Aviation Capital Holdings Limited. From 2011 to 2017, he acted as Head of European and Emerging Market corporate acquisition financing at Morgan Stanley working on some of the largest debt-driven transactions executed by the firm. He joined NatWest Bank on their Graduate Programme in 1993 before moving to Danske Bank as a Credit Analyst and later becoming Head of Origination in the Loan Syndications team. Between 2002 and 2011 he worked with RBS, Morgan Stanley and Santander originating, structuring and distributing debt-driven acquisition financing transactions across different credit profiles. Prior to co-founding Sirius Aviation Capital Holdings Limited, Kieran acted as Chief Commercial Officer at Stellwagen Capital. Kieran graduated from the University of Limerick in 1990 with a Bachelor of Business Studies.

Patrick O'Brien will shortly join Sirius Aviation Capital Holdings Limited as non-executive director and Chairman. Patrick is a Commerce graduate of University College Dublin. He joined KPMG Ireland in March 1979, was made a Partner in May 1987 and retired from the Firm in April 2011. Mr. O'Brien specialised in advising international leasing clients with particular emphasis on aircraft financing. He represented the Irish practice on the KPMG Leasing Tax Partners' Network and wrote a major work on Ireland's Double Taxation Agreements which was published by the Irish Taxation Institute. Given his specialisation in the aircraft leasing sector, Mr. O'Brien worked with the Irish Department of Finance on many legislative amendments to support Ireland's pre-eminent position in that sector. From 2005 to 2008 Mr. O'Brien worked at the Irish Tax Centre in the New York office of KPMG. During that period he advised a number of US aircraft lessors on the migration of their portfolios to Ireland following the changes to US tax law brought about by the Jobs Creation Act 2004. Mr. O'Brien serves on the Boards of Accipiter Holdings Limited, a subsidiary of Cheung Kong Holdings, Airspeed Limited, Apollo Aviation Management Limited, Atlas 2014-1 Limited, Chorus Aviation Capital Ireland Limited, Eirtech Aviation Limited, Intrepid Aviation Management Ireland Limited, Sato Aviation Ireland Limited, SDH Wings International Leasing Limited, Sierra Echo Aircraft Leasing Limited, Starmac Altair Holdings DAC and Gat Mi Vol 1 DAC, an Irish subsidiary of Development Bank of Japan.

Outside the aviation sector he is a director of NS Financial Services Holdings Limited, the rail leasing subsidiary of the Government-owned Dutch Rail.

Important Notice

Investors should note that the target dividend yield and target IRR are targets only and not profit forecasts and there can be no assurance that either of such targets will be met.

This announcement is a financial promotion and is not intended to be investment advice. The content of this announcement has been prepared by, and is the sole responsibility of the Company, and has been approved by Liberum, which is authorised and regulated by the Financial Conduct Authority, solely for the purposes of section 21 of the Financial Services and Markets Act 2000 (as amended) ("FSMA").

This announcement is an advertisement and does not constitute a prospectus and investors must subscribe for or purchase any shares referred to in this announcement only on the basis of information contained in the Prospectus to be published by the Company in due course (and in any supplementary prospectus) and not in reliance on this announcement. When made generally available, copies of the Prospectus may, subject to any applicable law, be obtained from the registered office of the Company and will be made available for viewing at the National Storage Mechanism at http://www.morningstar.co.uk/uk/NSM and on the Company's website.

This announcement does not constitute, and may not be construed as, an offer to sell or an invitation to purchase or otherwise acquire investments of any description or a recommendation regarding the Issue or the provision of investment advice by any party. No information set out in this announcement is intended to form the basis of any contract of sale, investment decision or any decision to purchase shares in the Company. The merits or suitability of any securities must be independently determined by each investor on the basis of its own investigation and evaluation of the Company and its securities. Any such determination should involve, among other things, an assessment of the legal, tax, accounting, regulatory, financial, credit and other related aspects of the securities.

This announcement may not be used in making any investment decision. This announcement does not contain sufficient information to support an investment decision and investors should ensure that they obtain all available relevant information before making any investment. No information in this announcement should be construed as providing financial, investment or other professional advice and each prospective investor should consult its own legal, business, tax and other advisers in evaluating the investment opportunity. No reliance may be placed for any purposes whatsoever on this announcement (including, without limitation, any illustrative modelling information contained herein), or its completeness.

Nothing in this announcement constitutes investment advice and any recommendations that may be contained herein have not been based upon a consideration of the investment objectives, financial situation or particular needs of any specific recipient.

The information and opinions contained in this announcement are provided as at the date of this announcement and are subject to change and no representation or warranty, express or implied, is or will be made in relation to the accuracy or completeness of the information contained herein and no responsibility, obligation or liability or duty (whether direct or indirect, in contract, tort or otherwise) is or will be accepted by the Company, Liberum, the Investment Adviser or any of their respective affiliates or by any of their respective officers, employees or agents in relation to it. No reliance may be placed for any purpose whatsoever on the information or opinions contained in this announcement or on its completeness, accuracy or fairness. This announcement has not been approved by any competent regulatory or supervisory authority.

Potential investors should be aware that any investment in the Company is speculative, involves a high degree of risk, and could result in the loss of all or substantially all of their investment. Results can be positively or negatively affected by market conditions beyond the control of the Company or any other person. The returns set out in this announcement are targets only. There is no guarantee that any returns set out in this announcement can be achieved or can be continued if achieved, nor that the Company will make any distributions whatsoever. There may be other additional risks, uncertainties and factors that could cause the returns generated by the Company to be materially lower than the returns set out in this announcement.

This announcement includes statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology. These forward-looking statements relate to matters that are not historical facts regarding the Company's investment strategy, financing strategies, investment performance, results of operations, financial condition, prospects and the dividend policies of the Company and the instruments in which it will invest. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. Each of the Company, Liberum, the Investment Adviser and their respective affiliates and their respective officers, employees and agents expressly disclaim any and all liability which may be based on this announcement and any errors therein or omissions therefrom. No representation or warranty is given to the achievement or reasonableness of future projections, management targets, estimates, prospects or returns, if any. Any views contained herein are based on financial, economic, market and other conditions prevailing as at the date of this announcement. The information contained in this announcement will not be updated. In particular, the target initial dividend yield and target net total return on net asset value figures contained in this announcement should not be taken as an indication of the Company's expected future performance or results. These are targets only and there is no guarantee that they can or will be achieved. Accordingly, investors should not place any reliance on such targets. This announcement does not constitute or form part of, and should not be construed as, any offer or invitation or inducement for sale, transfer or subscription of, or any solicitation of any offer or invitation to buy or subscribe for or to underwrite, any shares in the Company or to engage in investment activity (as defined by FSMA) in any jurisdiction nor shall it, or any part of it, or the fact of its distribution form the basis of, or be relied on in connection with, any contract or investment decision whatsoever, in any jurisdiction. This announcement does not constitute a recommendation regarding any securities.

Neither this announcement nor any part or copy of it may be taken or transmitted into the United States, Canada, Australia, the Republic of South Africa or Japan, or distributed directly or indirectly to US Persons (as defined below) or in the United States, Canada, Australia, the Republic of South Africa or Japan. Any failure to comply with this restriction may constitute a violation of applicable law. This announcement does not constitute an offer of securities to the public in the United States, Canada, Australia, the Republic of South Africa or Japan or in any other jurisdiction. Persons into whose possession this announcement comes should observe all relevant restrictions.

The offer and sale of the ordinary shares have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the "Securities Act") or under the securities laws of any other state or jurisdiction of the United States or under the applicable securities laws of Canada, Australia, the Republic of South Africa or Japan. The ordinary shares may not be offered, sold, delivered or distributed, directly or indirectly, in, into or within the United States or to, or for the account or benefit of, U.S. persons (as defined in Regulation S under the Securities Act). Subject to certain exceptions, the ordinary shares may not be offered, sold, delivered or distributed directly or indirectly to any national, resident or citizen of Canada, Australia, the Republic of South Africa or Japan.

In addition, the Company has not been, and will not be, registered under the U.S. Investment Company Act of 1940, as amended (the "Investment Company Act") and, as such, investors will not be entitled to the benefits of the Investment Company Act. No offer, purchase, sale or transfer of the ordinary shares may be made except under circumstances which will not result in the Company being required to register as an investment company under the Investment Company Act.

Liberum is authorised and regulated in the United Kingdom by the Financial Conduct Authority and Davy is regulated in Ireland by the Central Bank of Ireland. Liberum and Davy are acting for the Company and no one else in connection with the matters described in this announcement and will not be responsible to anyone other than the Company for providing the protections afforded to clients of each of them or for affording advice in relation to any transaction or arrangement referred to in this announcement. This announcement does not constitute any form of financial opinion or recommendation on the part of Liberum or Davy or any of their respective affiliates and is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities. Liberum and Davy are not responsible for the contents of this announcement or the Prospectus. This does not exclude any responsibilities which Liberum and Davy may have under the Financial Services and Market Act 2000 or the regulatory regime established thereafter.

Information to distributors

Solely for the purposes of the product governance requirements contained within: (a) EU Directive 014/65/EU on markets in financial instruments, as amended ("Directive 2014/65/EU"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing Directive 2014/65/EU; and (c) local implementing measures (together, the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the ordinary shares and C shares have been subject to a product approval process, which has determined that the ordinary shares to be issued pursuant to the Issue and any ordinary shares and/or C shares issued pursuant to any subsequent placing under the Placing Programme are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in Directive 2014/65/EU; and (ii) eligible for distribution through all distribution channels as are permitted by Directive 2014/65/EU (the "Target Market Assessment").

Notwithstanding the Target Market Assessment, distributors should note that: the price of the ordinary shares and/or C shares may decline and investors could lose all or part of their investment; the ordinary shares and the C shares offer no guaranteed income and no capital protection; and an investment in the ordinary shares and/or C shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Issue and any subsequent placing under the Placing Programme. Furthermore, it is noted that, notwithstanding the Target Market Assessment, Liberum and Davy will only procure investors who meet the criteria of professional clients and eligible counterparties.

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of Directive 2014/65/EU; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the ordinary shares and/or the C shares.

Each distributor is responsible for undertaking its own target market assessment in respect of the ordinary shares and the C shares and determining appropriate distribution channels.

PRIIPS Regulation

In accordance with the Regulation (EU) No 1286/2014 of the European Parliament and of the Council of 26 November 2014 on key information documents for packaged retail and insurance-based investment products (PRIIPs) and its implementing and delegated acts (the "PRIIPs Regulation"), a key information document in respect of the ordinary shares will be prepared by Sirius Aviation Capital Holdings Limited at the time of the publication of the Prospectus and will be available to investors on the Company's website. If a class of C shares are issued under the Placing Programme, Sirius Aviation Capital Holdings Limited will make available a key information document in relation to such class of C shares as required under the PRIIPs Regulation.

If you are distributing the ordinary shares and/or C shares (if applicable), it is your responsibility to ensure that the relevant key information document is provided to any clients that are "retail clients".

 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.
 
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