29 September 2011 – by the Shephard News Team – CHC Helicopter has signed an $80 million sale-leaseback agreement with Milestone Aviation Group, in a development described by the two companies as the commencement of a ‘significant new financing relationship’.
The arrangement covers the sale-leaseback of five aircraft, two Sikorsky S92s and three Eurocopter AS332L2s, which are currently serving oil and gas contracts in Denmark, the UK and the Falklands.
Speaking to Shephard, Milestone CEO Bill Kelly said the agreement, which was Milestone’s largest to date, was a significant development for the fledging company.
‘We are very excited to be partnering with such a great company as CHC and closing the deal pushes us out to $250 million worth of deals signed to date with another $150 to $200 million worth of letters of intent pending,’ Kelly said.
‘We are now partnering with companies around the world – from larger companies, like CHC, to a number of smaller operators – and this is really proof that our business model of providing 100% financing is really appealing for them.’
The two companies have already settled the first part of the transaction, which is valued at $50 million, and expect to close the remainder within the next two months.
The first aircraft leasing company focusing solely on helicopters and private jets, Milestone launched in 2010 with the strategy of addressing the liquidity needs of an under-pressure market through 100% operating lease financing.
The company has since leased more than two dozen helicopters and private jets, with the CHC agreement expected to push the value of the deals to more than $300 million by the end of 2011.
While Kelly noted that the company did not expect to close all the agreements associated with the current letters of intent, he was bullish about future opportunities, especially in fast-growing markets such as Brazil and India.
‘We have been operating for less than a year now and were slightly surprised that we managed to break into a company like CHC so early but they have some sophisticated owners who like to have a range of options in how they finance their operations. Given the success we have seen to date, that is certainly something that has echoed throughout the marketplace.’
In a statement William Amelio, CHC’s president and chief executive officer, said Milestone’s entry into the helicopter-leasing sector was a positive development for the industry.
‘Global capabilities, creativity and the ability to provide significant amounts of capital make them an important financial partner for CHC,’ Amelio said.