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Asian Global Aviation Hegemony As reported by ExitHub earlier this year, more than a dozen entities were invited to submit bids for CIT’s aircraft leasing business, with a preponderance of Asian bidders, given the growing Asian demand and shifting balance of the global aviation industry to Asia. As airlines serving Asia Pacific are attempting to expand their fleets, they’re finding that the leasing business can be more lucrative than operating an airline. The move comes after BOC Aviation Ltd. (HKG: 2588), an arm of Bank of China, the country’s fourth-largest lender by assets, made a $1 billion IPO in Hong Kong for its aircraft leasing business, BOC shares began trading on June 1. BOC Aviation was the second aircraft leasing company listed in Asia after China Aircraft Leasing Group (CALC) floated its shares in Hong Kong two years ago. BOC Aviation’s fleet is nearly four times bigger than CALC’s though, at almost 230 planes. Malaysian low-cost airline AirAsia Berhad (MYX: 5099) is also planning to divest ts aircraft leasing subsidiary Asia Aviation Capital Ltd., while rivals CDB Leasing and Minsheng Financial Leasing, where reportedly preparing to list in Hong Kong later this year. The CIT Group CIT Commercial Air owns, finances and manages a fleet of more than 350 commercial aircraft serving approximately 100 customers in 50 countries. The company offers an array of industry-leading services, supported by a fleet of Airbus, Boeing, Embraer and Bombardier aircraft. CIT has seven aircraft leasing, advising and syndication offices in Dublin, Ireland; Ft. Lauderdale, Fla.; Los Angeles, Calif.; New York, N.Y.; Seattle, Wash.; Singapore; and Toulouse, France. Founded in 1908, CIT is a financial holding company with more than $65 billion in assets. Its principal bank subsidiary CIT Bank NA, has more than $30 billion of deposits and more than $40 billion of assets. It provides financing, leasing and advisory services principally to middle market companies across more than 30 industries primarily in North America, and equipment financing and leasing solutions to the transportation sector. It also offers products and services to consumers through its Internet bank franchise and a network of retail branches in Southern California, operating as OneWest Bank, a division of CIT Bank. The company is headquartered in Livingston, N.J. CIT has received a “non-objection” from the Federal Reserve Bank of New York for its Amended Capital Plan subject to the closing of the transaction. The Amended Capital Plan authorizes CIT to return $2.975 billion of common equity to shareholders from the net proceeds of the sale; return up to an additional $0.325 billion of common equity contingent upon the issuance of a similar amount of Tier 1 qualifying preferred stock; and pay common dividends totaling $64 million per year after the transaction is completed, subject to quarterly approval by the CIT Board of Directors. “The sale of CIT Commercial Air represents an important milestone for CIT and follows an extensive dual-track process that was designed to maximize shareholder value. This transaction will strengthen our balance sheet, simplify our business and enable us to return significant capital to our shareholders,” said Ellen R. Alemany, chairwoman and chief executive of CIT Group. “We are making meaningful progress on our strategy to create a leading national middle-market bank.” HNA Group HNA, a leader in aviation and tourism, was founded in 1993 by Chen Feng. Over the past two decades, it has grown from a local aviation transportation operator into a multinational conglomerate encompassing Aviation, Holdings, Tourism, Capital, Logistics and EcoTech. Prior to founding HNA, Chen Feng served as an aviation advisor to the governor of Hainan Province, and presided over the formation and subsequent restructuring of Hainan Airlines. He also created and served as chairman of Grand China Air Co. to hold the airline assets of the HNA Group. During China’s Cultural Revolution, he reportedly worked for the People’s Liberation Army Air Force, and after 1979, he worked at China’s Civil Aviation Administration, and the National Air Regulations Bureau. In 1984, he graduated from the Lufthansa College of Air Transportation Management in Germany. In 1995, he obtained an MBA degree from the Maastricht School of Management in the Netherlands, and in 2004 he obtained a diploma from Harvard Business School. Feng was born in Huozhou, Shanxi province and raised in Beijing. HNA Group aspires to become one of the top 50 companies in the world by 2030, it says. In 2015, HNA had revenues of nearly RMB190 billion ($28.6 billion), total assets of over RMB 600 billion ($90 billion) and employed nearly 180,000 employees worldwide. HNA is headquartered in Haikou, Hainan, China. Yesterday, HNA EcoTech said it agreed to acquire Beijing-based information technology (IT) outsourcing services provider Pactera Technology International Ltd. from New York global private equity firm Blackstone Group (NYSE: BX) and other shareholders. The purchase price was reportedly $675 million. In early August, HNA Group agreed to invest $336 million in San Francisco-based RocketSpace, a leading technology accelerator campus and co-working space for high-growth startup, in a strategic joint venture deal to fuel RocketSpace’s global expansion, including China. A few days later, HNA’s subsidiary Hainan Airlines Co. Ltd. acquired a 24% stake in Brazil’s third largest airline Azul SA for $450 million, becoming its largest single shareholder. In February, HNA agreed to acquire Ingram Micro Inc. (NYSE:IM) for $6 billion, the largest Chinese takeover of a US information technology company. Photo: Chen Feng, Founder & Chairman of HNA Group.]]>