FLY continues fleet strategy as it sells 33 Aircraft and announces a 47% reduction in management fee

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By TESTCustomwebLP TESTCustomwebLP June 22, 2015 15:31

FLY continues fleet strategy as it sells 33 Aircraft and announces a 47% reduction in management fee

FLY Leasing today announced the sale of 33 aircraft as part of its fleet renewal strategy and also separately announced a 47% reduction in its annual management fee. The 33 aircraft from its portfolio have been sold for a total of $985 million. This represents a $35 million pre-tax gain over approximate net book values as of June 30, 2015. The aircraft will transfer to the new owner over the course of 2015 and pro rata gains will be recognized at time of transfer of each aircraft. The sale is subject to usual closing conditions.

“The sale is a milestone in our ongoing fleet rejuvenation plan, producing approximately $425 million in unrestricted cash to invest in newer aircraft,” said Colm Barrington, CEO of FLY. “The sale substantially reduces financial leverage, decreases exposure to some of our larger lessees and eliminates legacy accounting issues that have negatively impacted FLY’s GAAP results. Combined with the previously announced 2015 dispositions, the number of aircraft 10+ years of age in FLY’s fleet will decrease from 61 to 33. We believe these factors will help FLY increase return on equity.”

DUBLIN, Ireland, June 22, 2015 – FLY Leasing Limited also announced that its annual management fee payable to BBAM, FLY’s manager and servicer, has been reduced from $10.7 million per annum to $5.7 million per annum, or 47%, in connection with the aircraft sale today. “The fee reduction reflects BBAM and FLY’s aligned goal of maximizing returns for FLY’s stakeholders,” said Colm Barrington, CEO of FLY. “FLY receives tremendous advantages and economies of scale through its partnership with BBAM. As the world’s third largest manager of commercial leased aircraft with an established 25-year track record, BBAM provides FLY with global breadth, depth and experience.”

“BBAM remains committed and focused on creating value for FLY’s stakeholders. BBAM stakeholders own more than 8% of FLY’s equity, demonstrating that BBAM’s interests are aligned with FLY’s stakeholders,” said Steve Zissis, CEO of BBAM.

The fee reduction will take effect as of July 1, 2015.

FLY Leasing was profiled along with other listed lessors in Airline Economics issue 26 – This sale and reduction in management fee further underlines the fact that FLY shares offer significant value at this time. The sale and management fee reduction also further helps FLY on the way to gaining an investment grade rating.

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By TESTCustomwebLP TESTCustomwebLP June 22, 2015 15:31