AVIC Capital Co.'s plans to purchase aircraft lessor Avolon Holdings Ltd. suffered a blow after the Irish firm rejected a bid from the Chinese company to buy a majority stake.
The financing arm of local planemaker Aviation Industry Corp. of China had 24 Nov. submitted a bid to buy a 51 per cent stake in Avolon and was planning to pay in cash, the state-owned Chinese company said in a statement to the stock exchange today. When contacted, Avolon spokesman Jonathan Neilan said the company won’t deny it turned down the offer.
“They said they were unable to accept the value of AVIC’s final offer,” AVIC Capital said in the statement, without providing a value for its offer. “In light of this situation, we think there is no way to continue with this transaction and we have decided to terminate plans to take over Avolon,” the company said, adding it won’t revive the plan for six months.
The financing arm of Chinese aircraftmaker AVIC disclosed in August it’s in talks to buy Dublin-based Avolon. The company’s Shanghai-listed shares have been suspended since 12 Aug. and will remain so, according to the statement.
AVIC Capital said in 2011 that it was interested in buying overseas lessors as it expands its fleet to meet rising domestic travel demand. The China Banking Regulatory Commission said in July financial institutions with aircraft-leasing businesses should look for expansion and fundraising opportunities overseas.
Bloomberg News, edited by Hospitality Ireland
