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Genesis gives Aercap aircraft and cash
26 October 2009
By buying Genesis, AerCap does not just get more aircraft and new customers making it the world’s largest independent aircraft lessor. It also gets cash to finance its own aircraft deliveries and growth. Alasdair Whyte looks at why the two listed aircraft leasing companies will fit together so well.
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[Genesis]
[Aercap]
[debis Airfinance]
When Genesis Lease’s share price hit $2.49 last November it did not attract much attention. Lehman’s collapse had affected the prices of all aircraft leasing companies which trade closely to financial institutions. It was the same in January 2009. But when Genesis Lease stayed at about $2.50 in February a number of arbitrage investors who recognized it was trading well beneath its book value started buying stock.
“It looked cheap to us so we moved in with a decent position,” says one investor at a Connecticut fund. His decision paid off in September when AerCap announced a $1.75 billion all-share takeover of Genesis, creating the world’s largest independent aircraft leasing company.
Arbitrage investors and AerCap were not the only people who thought Genesis was a bargain. In fact, AerCap could have missed out because other leasing companies, including Aviation Capital Group, one of the...
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