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GE's Jet-Leasing Unit Draws Sale Interest From GIC

Kiel Porter, Rick Clough
Plane going in for landing. Photographer: SeongJoon Cho/Bloomberg

Singapore’s sovereign wealth fund has expressed interest in buying General Electric Co.’s plane-leasing unit, said people with knowledge of the matter.

At a meeting between GIC Pte. and GE officials in August, fund executives asked whether the Boston-based company would consider selling all or a part of GE Capital Aviation Services, said the people, who asked not to be identified because the matter was private. No decision was made at the meeting but GE subsequently discussed the merits of such a deal internally and with external advisers, the people said.

A GE representative declined to comment. Representatives for GIC, which is a GE investor, didn’t immediately respond to requests for comment.

GE Chief Executive Officer John Flannery has previously resisted calls to sell the leasing unit, known as GECAS, because it complements the company’s jet-engine manufacturing operations. Still, Flannery has acknowledged that there’s a lot of interest, telling Bloomberg in an interview in June that potential acquirers “call us constantly.”

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The GE unit sits alongside Dublin-headquartered AerCap Holdings NV as one of the world’s largest plane-leasing companies. It has a fleet of almost 2,000 aircraft valued at about $40 billion, according to the company’s website. GECAS is also a significant player in the helicopter market after its $1.8 billion acquisition of Milestone Aviation Group Ltd. in 2015.

Aircraft leasing has remained a key business for GE even as it has pulled back from most other finance markets. GECAS generated $311 million in profit in the second quarter, while GE Capital overall lost $273 million.

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Deal activity has picked up in the jet-leasing space as a travel boom in Asia has fueled interest in aviation investment. In June, Goshawk Aviation Ltd., an aircraft lessor owned by the family of the late Hong Kong billionaire Cheng Yu-tung, agreed to buy Sky Aviation Leasing International Ltd. for $2.8 billion, including debt.

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