China’s AVIC Capital Confirms Talks to Acquire Avolon

China’s AVIC Capital Co. (600705) is in talks to buy Dublin-based aircraft-leasing firm Avolon Holdings Ltd., the company said in a stock exchange filing.

The financing arm of Aviation Industry Corp. of China, is negotiating with “relevant parties” and has begun reviewing Avolon’s finances, AVIC Capital said in a statement to the Shanghai Stock Exchange dated yesterday. AVIC Capital said a report that its parent and sovereign wealth fund China Investment Corp. were buying the company for 12 billion euros ($16.1 billion) was “not true.”

“The company has not reached a binding agreement or offer with relevant parties regarding the acquisition of Avolon and cannot guarantee the completion of the deal,” AVIC Capital said in the statement, adding that there were “bigger inaccuracies” in a previous report about the deal, without being more specific. AVIC Capital said in a separate statement that it was halting trading of its Shanghai shares for five days from today.

Jonathan Neilan, Managing Director of FTI Consulting who is an external spokesman for Avolon, declined to comment when asked about AVIC Capital’s statement. CIC, which wasn’t mentioned in AVIC’s statement, didn’t respond to two calls to its press office.

China Business News reported Aug. 8 that AVIC, the country’s largest aerospace company, and CIC were jointly seeking to acquire Avolon for 12 billion euros. Reuters said Aug. 11 that the two companies were in talks to buy it for $4 billion to $5 billion, including debt.

AVIC Capital said last September that it was interested in buying overseas lessors as it expands its fleet to meet rising domestic travel demand. Last month, the China Banking Regulatory Commission said financial institutions with aircraft-leasing businesses should look for expansion and fundraising opportunities overseas.

To contact the reporter on this story: Clement Tan in Hong Kong at ctan297@bloomberg.net

To contact the editors responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net Brendan Scott, Frank Longid

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