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Alafco nears USD 2.2 billion Macquarie AirFinance takeover

IFM_Macquarie AirFinance
The owners of Macquarie AirFinance said separately that they would approve the USD 2.2 billion purchase of the aircraft fleet owned by Alafco

Alafco Aviation Lease & Finance Co. (Alafco), a Kuwait-based aircraft lessor, has signed a framework agreement that will transfer order for 20 Boeing 737 Max 8 aircraft to Macquarie AirFinance, potentially opening the door for a USD 2.2 billion acquisition by the Australian aircraft leasing company.

According to a regulatory disclosure on the Kuwait stock exchange where it is listed, Alafco, which the Kuwaiti government supports, said it has finished the shifting of the Boeing order book to Macquarie AirFinance by executing the pact in respect of the Max purchase agreement dated October 2012. Amid this, its shares were trading 2% higher at 204 Kuwaiti fils.

The owners of Macquarie AirFinance, Macquarie Asset Management, PGGM Infrastructure Fund, and Australian Retirement Trust, said separately that they would approve the USD 2.2 billion purchase of the aircraft fleet owned by Alafco. In addition, it stated that BNP Paribas, Citibank, MUFG Bank, and Natixis would all underwrite a USD 1.65 billion acquisition loan to support the deal.

“This strategic acquisition will enable Macquarie AirFinance to grow its network of customers globally while increasing its exposure to more efficient aircraft,” said Jonathan Watkinson-Hall, Head of Asset Finance at Macquarie Asset Management.

On December 27th, 2022, the shareholders of Alafco unanimously agreed that the transaction should go forward. The statement states that the deal is expected to be finalized in the year 2023; however, this is contingent on the fulfilment of the standard closing conditions.

There are now 77 Boeing and Airbus aircraft in Alafco’s fleet, and the company has placed orders for another 68 aircraft from both manufacturers. According to the information that can be found on its website, the company has lease agreements with several different airlines, including Air India, British Airways, and Malaysia Airlines. In addition, the Kuwait Finance House KSCP, the Gulf Investment Corporation, and the Kuwait Airways Company are some of the company shareholders.

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