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Abu Dhabi, UAEWednesday 26 September 2018

Dubai Aerospace Enterprise sells 16 Boeing, Airbus jets worth $900 million

Proceeds will be used to pay down debt and support growth plans, CEO says 

Dubai Aerospace Enterprise (DAE) won rating upgrades from S&P and Moody's, based on its successful integration of Dublin-based lessor Awas. Courtesy: Dubai Aerospace Enterprise
Dubai Aerospace Enterprise (DAE) won rating upgrades from S&P and Moody's, based on its successful integration of Dublin-based lessor Awas. Courtesy: Dubai Aerospace Enterprise

Dubai Aerospace Enterprise, the Middle East’s largest aircraft lessor, signed agreements to sell 16 Boeing and Airbus aircraft worth $900 million that will be used to repay debt and fund growth plans.

The three deals for the sale of 737, A320, A330 and A350 jets are expected to close in the second half of the year, DAE said in a statement on Wednesday. T

“This divestment activity will help us optimise our portfolio composition and monetise some of our recent larger-scale investments,” Firoz Tarapore, chief executive of DAE, said.

The state-owned company is in talks with Airbus and Boeing for an order of another 400 narrow-body aircraft worth more than $40 billion at list prices. DAE is growing its fleet further after it acquired Dublin-based lessor Awas last year in a deal that propelled it to the top ranks of global aircraft lessors, raising its portfolio to nearly 400 planes worth $14bn.

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The deals for the sale of 16 aircraft will not impact DAE’s total number of customers, Mr Tarapore said, without revealing the buyers in the agreement.

The planes have an average age of two years and are currently on lease to 11 airlines in 11 countries.

DAE Capital, the leasing arm which signed the three agreements, has formed an asset management unit that will seek to build a $5bn portfolio of assets in the coming years, the company said in January.

Last week, the lessor signed a deal for an unsecured revolving credit facility of an initial $480mn, that can be extended up to $800mn, as it seeks to diversify its sources of funding.

It is also considering the issuance of a $500m sukuk and could tap the market either later this year or in 2019, depending on market appetite, Mr Tarapore said in April.

In 2017, DAE raised $2.3bn in senior bonds split across three tranches in the United States to fund its acquisition of Awas.

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