DVB Bank, Mitsubishi Corporation (UK) and ELF Corporation enter into new engine leasing venture
24-Mar-2010 DVB Bank SE (DVB), the Frankfurt-based bank that specialises in transport finance, Mitsubishi Corporation (UK) Plc (MCUK), the London subsidiary of Mitsubishi Corporation (MC), the global trade and investment company and Engine Lease Finance Corporation (ELF), the world's largest independent aero-engine lessor, have formed a joint venture company, Deucalion MC Engine Leasing Limited, incorporated in Ireland, for the purpose of investing in commercial aircraft engines subject to leases with airlines worldwide.
The joint venture company has completed its first portfolio acquisition, consisting of seven commercial aero engines which were acquired from ELF during December 2009 and March 2010. The portfolio comprises IAE V2500, CFM56-5/-7 and CF6-80 engine types on operating leases with carriers from Europe, the Middle East, Asia and the Americas.
The leases range in term from one to four years and have a staggered maturity profile. ELF retains lease management and remarketing responsibility.
Under the terms of the agreement, DVB and MCUK are the joint senior debt providers and Deucalion funds (managed by DVB's Group Investment Management team in London), MCUK and ELF are equity providers. DVB's engine management subsidiary, TES Aviation completed the pre purchase due diligence on behalf of the joint venture partners.
Bertrand Grabowski, Member of the Board of Managing Directors of DVB and responsible for Aviation commented, "We are delighted to have concluded this new joint venture vehicle which represents our first such collaboration with Mitsubishi Corporation (UK) Plc and our third with Engine Lease Finance Corporation. Our previous collaborations have proved to be very successful and we fully expect this new venture to be equally so. This new venture continues the Bank's strategy of investing in the aero engine sector, giving it an ownership interest through the Deucalion funds in a total of 24 aero engines on leases worldwide. This is in addition to its successful acquisition of the TES Aviation business in 2007."
Katsuaki Morooka, General Manager of the Industrial Finance, Logistics and Development Division in MCUK, added, "We are very excited to be able to start this new business platform with ELF and DVB Bank in Europe. MC is currently running an aircraft leasing business in Dublin and we believe that this joint venture will give a new and progressive perspective to our airline business in this region. We hope the project will go from strength to strength and grow with the support of our partners."
Jon Sharp, President and CEO of ELF stated, "We are pleased to have established a new partner in Mitsubishi Corporation (UK) Plc and believe that our affiliation with them will reflect the excellent collaboration we have with Deucalion and DVB, with whom we now have concluded our third such transaction. Our intentions towards our partnerships are always long-term driven and we look forward to achieving more together."