SMBC buys RBS aviation business
RBS has agreed to sell its aviation business to Sumitomo Mitsui Banking Corporation (SMBC) for US$7.3bn.
The sale is expected to close before the end of Q3 2012.
The Aviation Capital has risk weighted assets of US$2.5bn, while the future order commitments of US$3.7bn will transfer with the business.
RBS is selling the business to strengthen its balance sheet and core tier 1 capital position, which will also reduce wholesale funding requirements and fund ongoing lending. Additionally, the disposal is expected to reduce RBS’s non-core division's third party assets by US$7bn on completion.
Commenting on the transaction, RBS finance director, Bruce Van Saun says: "Reaching agreement on a deal of this scale in such a volatile market is a significant success for our non-core division and a credit to SMBC. This transaction further evidences our progress in reducing our non-core portfolio and returning the group to a position of strength."
Aviation Capital, which was established in 2001, is headquartered in Dublin, Ireland and employs 69 specialists based in Dublin and eight other locations in Europe, US and Asia. It currently owns 206 aircraft and has commitments to purchase a further 87 by 2015.
The sale of the business involves the disposal of the entire issued share capital of RBS Aerospace, RBS Aerospace (UK) and RBS Australia Leasing together with other assets comprising the RBS Aviation Capital operating lease business.
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