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LONDON (Alliance News) - Sirius Aircraft Leasing Fund Ltd said Monday it is planning to raise USD250 million through an initial public offering on the London Stock Exchange, expected in early November.
The aviation leasing firm intends to issue shares at USD1.00 per share, implying around 250 million shares to be issued. The investment adviser for the firm will be Sirius Aviation Capital Holdings Ltd.
The company added it was also planning to launch a 12-month placement programme. Under this programme, it could issue up to a further 300 million ordinary shares of C shares.
"We are pleased to announce our intention to launch the IPO of the Sirius Aircraft Leasing Fund," Sirius Aviation Capital Chief Executive Officer Howard Millar said. "The fund will invest in used single aisle aircraft to target an attractive dividend yield of 8% per annum with the potential for capital upside."
Sirius expects to target an annualised dividend yield of 8% once the portfolio is fully invested. It is also targeting an internal rate of return over the long term of 10% per year.
"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," Millar added. "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."
Sirius explained there was a "liquid" market for single-aisle used aircraft as traditional lessors sell their older aircraft to maintain the average age of their fleet. In 2017, USD8 billion worth of aircraft like this have been sold by the major listed lessors.
What is more, with older aircraft offering "significant cost savings" for lessees there is also growing demand for them. This includes with large airlines with British Airways, Aerlingus and Iberia-owner International Airlines Group SA and Lufthansa AG.
Sirius will publish a prospectus in late october.