Abu Dhabi: Waha Capital, an Abu Dhabi-based investment company, has entered into a hedging transaction on half of its shares in AerCap Holdings, an aircraft leasing company, the company said in a statement on Wednesday.
The transaction provides additional funding of $575 million, which will be used to partially repay existing debt and to fund new investment opportunities.
Post-transaction, Waha Capital’s cash balance and available credit facility limit will provide funding of approximately Dh1.8 billion for new investments, the company stated. It added that through the transaction, the company has effectively locked in the value of these shares at a minimum price of $42.39 per share, up to a cap of $61.23 per share, subject to certain adjustments.
This price range compares well to the original investment cost of $13.00 per share and its carrying value on Waha Capital’s balance sheet of $31.87 per share as of 30 June 2014. AerCap’s share price closed at $49.17 on September 2, 2014.
In May, AerCap completed the acquisition of International Lease Finance Corporation from American International Group. The combined entity is now the largest independent aircraft leasing company in the world, with an owned and managed fleet of over 1,300 aircraft and total assets of approximately $44 billion.
After the hedging transaction, Waha Capital will retain an economic shareholding of approximately 14.1 per cent in the combined, larger company.
In August, Waha Capital reported a record net profit of Dh1.138 billion for the second quarter of 2014, the first time quarterly net profit exceeded the Dh1 billion mark. The company’s half-year net profit reached Dhs1.289 billion, representing a nine-fold year-on-year increase.
Waha Capital portfolio consists of direct investments across a number of sectors which include aircraft leasing, healthcare, consumer finance, offshore oil and gas services, infrastructure and industrial real estate.
