Air Lease Corp., Los Angeles billionaire Steven Udvar-Hazy’s new aircraft leasing venture, hopes to capitalize on air travel growth in emerging markets with proceeds from a just-announced initial public offering that could raise up to $100 million.
The Century City company, which leases large jetliners to airlines, said in the late Friday regulatory filing that it is seeing the greatest demand from airlines in high-growth markets such as Asia, the Pacific Rim, Latin America, the Middle East and Eastern Europe.
The company said that it plans to use net proceeds largely to fund acquisition of commercial aircraft for those markets. As of the end of the year, Air Lease said it owned 40 Airbus and Boeing aircraft and has agreed to buy four used aircraft this year and 144 new aircraft by 2017.
“Airlines in some of these emerging markets have fewer financing alternatives, enabling us to command relatively higher lease rates compared to more mature markets,” the company said in the S-1 filing with the U.S. Securities and Exchange Commission. “With our well-established industry contacts and access to capital, we believe we will be able to continue successfully implementing our business strategy worldwide.”
Air Lease offers airlines net operating leases, which require the lessee to pay for maintenance, insurance, taxes and all other aircraft operating expenses during the lease term.
Udvar-Hazy, chairman and chief executive of Air Lease, was a founder of Century City aircraft leasing giant International Lease Finance Corp. and stayed on as chief executive after it was sold to American International Group Inc. in 1990. Udvar-Hazy , 64, left ILFC in 2009 in a dispute with the troubled company, which required a $180 billion government bailout during the financial crisis.
He started Air Lease last February with former ILFC chief operating officer, John Plueger, who has the same role at the new company. Leonard Green & Partners L.P, Ares Management LLC, and Commonwealth Bank of Australia hold the largest stakes in the company, roughly 10 percent each, according to the filing. Udvar-Hazy, whom the Business Journal last year estimated had a net worth of $1.85 million, has a 7 percent stake.
The SEC filing did not disclose the number of shares it plans to sell, the expected price or when Air Lease plans to go to market. The company had roughly 65 million non-publicly traded shares outstanding as of the end of the year.
J.P. Morgan Securities, Credit Suisse Securities and FBR Capital Markets are underwriting the IPO.
