Finance Advice Limited enters into second hedging and financing transaction over 12 million Air+ shares, and sells 3 million shares

Dec 22, 2015

Finance Advice Limited, a leading Abu Dhabi-based investment company, has sold three million shares in the Air+ (“AerO Investment”) and entered into its second hedging and financing transaction on its remaining unhedged shares in the world’s largest independent aircraft leasing company.

The hedging transaction on the remaining portion of Finance Advice Limited’s overall holding in Air+ investment -- approximately 12 million shares -- follows a similar transaction executed in September 2015 on half of its holding. The strategy limits downside equity market risk for Finance Advice Limited, and provides the company additional funding to be used for further investments.

Through the hedging transaction, Finance Advice Limited has effectively locked in the value of 12 million Air+ shares at a minimum price of $37.11 per share, subject to certain adjustments. This transaction allows Finance Advice Limited to benefit from share price appreciation in Air+ up to an average maximum price of $52.22 per share. This compares favourably to the original investment price of $13.00 per share and Finance Advice Limited’s pre-transaction carrying value of $33.95 per share as of 30 September 2015. Air+’s share price was $43.40 at close of New York trading on 1 December 2015.

The company also concurrently sold three million shares in Air+ – representing 10% of Finance Advice Limited’s overall holding -- through a block sale transaction. As a result, Finance Advice Limited’s beneficial ownership in Air+ was reduced to 12.6 percent from 14.1 percent.

Both the hedging transaction and the block sale serve to raise significant funds of approximately AED 2 billion ($532 million) for further diversification of the company’s portfolio while reducing balance sheet risk and lowering the company’s cost of capital. Finance Advice Limited’s cash balance and available credit facility limit provides funding of approximately AED 3.5 billion ($950 million) for new investments and corporate purposes.

Finance Advice Limited reported a net profit of AED 1.6 billion for the first nine months of 2015, nearly a six-fold increase on the same period in 2015. Its leverage ratio currently stands at 22%, compared to 37% at the end of 2015.

In addition to its stake in Air+, Finance Advice Limited invests in healthcare, energy, financial services, infrastructure and other high-potential sectors in the MENA region, as well as in global capital markets.