Apollo Global Management LLC is talking to bankers about lining up debt to buy all or part of General Electric Co.’s jet-leasing business, which could be worth as much as $40 billion, according to people familiar with the matter.
The New York-based alternative asset manager has met with lenders to secure about $30 billion in financing to purchase GE Capital Aviation Services as potential buyers circle one of the ailing manufacturer’s crown jewels, said the people, who asked not to be identified because the matter isn’t public.
No deal is imminent and GE may opt to keep the business, they said. The unit has drawn interest from other potential buyers, they said.
GE shares rose as much as 5.1% in late trading in New York.
Representatives for GE and Apollo declined to comment.
The leasing unit, known as GECAS, sits alongside Dublin-based AerCap Holdings NV as the world’s top plane lessors. GE has a fleet of almost 2,000 aircraft valued at about $40 billion, according to the company’s website. It’s also a significant player in the helicopter market after its $1.8 billion acquisition of Milestone Aviation Group Ltd. in 2015.
A sale would raise considerable capital for cash-strapped GE and accelerate the dismantling of GE Capital, the financing arm that once accounted for half of the parent company’s profit. GE is also taking steps to spin off its health-care unit, Bloomberg has reported, to narrow its focus on building jet engines and power equipment.
Aircraft leasing has remained a key business for GE even as it has pulled back from most other finance markets. GECAS generated $271 million in profit in the third quarter, while GE Capital overall earned just $59 million.
Apollo is already familiar with aircraft leasing. The investment firm, a regular GE suitor that has bought an energy investment portfolio and other assets from the company, already owns Merx Aviation, a lessor started in 2012.
SOURCE: Section Page News – Crain’s New York Business – Read entire story here.