| Mon 29 Jul 2002, 0:00 | | Imperial Holdings Limited - Safair Lease Finance A |
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Imperial Holdings Limited - Safair Lease Finance Awarded R2-Billion Saa
Contract
Safair Lease Finance Awarded R2-Billion SAA Contract
Imperial Holdings Limited
Johannesburg - Monday July 29, 2002
JSE CODES: Imperial - IPL ISIN - ZAE 0000503620
Sanlam - SLN ISIN - ZAE 000028262
Recently established Safair Lease Finance (Pty) Limited (SLF) is leasing
five new Boeing 737-800s to South African Airways.
These five aircraft, which have a capital value of around R2-billion,
were ordered from Boeing last year by SAA and SLF has taken over the
purchase from SAA. SAA took delivery from SLF of the first aircraft in
Seattle on Friday last week and it is expected to arrive in South Africa
today (Monday).
SLF is the new 50/50 joint venture aviation financing company formed
through a partnership between Imperial Holdings, the country`s leading
mobility group, and the financial services group, Sanlam and its
investment banking arm, Genbel Securities (Gensec).
Launched last month SLF had committed assets totalling R1,5-billion
through lease agreements and an initial funding capacity of at least R5-
billion. It had secured a US$50-million agreement with KLM Royal Dutch
Airlines to finance existing aircraft in their fleet and earlier this
year signed a 80-million Euro contract with DHL International.. With
today`s transaction with the national carrier, its asset book now
exceeds R3,5-billion.
At the time of the launch of SLF, chief executive Ralph Boettger
presaged the SAA announcement by saying that SLF expected to add a
further R2-billion to its books within weeks. Today`s announcement of
the finalisation of the lease agreement with SAA is confirmation of that
transaction.
Although the aircraft are being delivered over the next two years, the
lease agreements with SAA terminate concurrently in 2012. The second
Boeing 737-800 will be delivered in August and the third around
October/November of this year. These are 10-year leases. The fourth
aircraft, on a nine-year lease, will be delivered during 2003 and the
final aircraft, on an eight-year lease, will be delivered to SAA during
2004.
Mr Boettger said that the SAA lease agreement for the Boeing 737s is
part of SAA`s fleet renewal programme. "These new Boeing 737s are the
most modern, state-of-the-art narrow body airliners in the market today
and will enhance SAA`s fleet. They will be flown on regional as well as
domestic routes. The purchase of the five new Boeings also entrenches
our already strong relationship with Boeing."
Mr Boettger added that the new lease agreement provides SLF with a
steady annuity income stream over the next decade and adds dollar-based
assets to the SLF balance sheet.
Commenting on the transaction, Gensec Bank chief executive Marius
Ferreira said that this latest transaction had cemented the relationship
between the country`s leading mobility group, Imperial Holdings which
owns Safair and is a joint partner in SLF, and the investment bank,
which has Sanlam as its parent.
"We see great potential in the specialist aviation leasing market.
Partnering with the country`s leading experts in the market is
consistent with the international trend for aviation leasing businesses
to link up with institutions with significant financial liquidity,
specialist expertise and access to the international capital markets.
We can provide that while the Imperial team can source the transactions.
We believe that this partnership has exciting growth potential."
ends
Please note:
IMPERIAL HOLDINGS activities include a wide range of services relating
to motoring, car rental and tourism, transport, trucking, aviation
leasing, logistics and fleet management outsourcing, forklifts, and a
comprehensive related financial services arm supplying banking,
short-term insurance and life assurance. While these services combine to
facilitate maximum synergy between business entities, a decentralised
management structure engenders industry best practice. Management is
empowered to develop each business with entrepreneurship into unique
business units within the strength and support structures of the
Imperial group.
Imperial employs 25 000 people at locations in 26 countries and had
total assets of R20-billion at December 25, 2001 and its revenues for
the six months to December 25 totalled R13,7-billion.
Visit our websites - www.imperial .co.za and www.imperialtoday.co.za
GENSEC BANK is a leading South African investment bank, specialising as
a wholesale provider of derivative-based risk management products to the
savings industry. It is also a prominent arranger of debt and equity
finance for corporates and is a manager of private equity funds.
Corporate action advice and transaction support is provided to listed
and unlisted companies by the corporate finance advisory unit. Through
its proprietary trading desk the bank acts as a market maker in most
South African financial instruments.
Gensec Bank is a subsidiary of Sanlam and is fully guaranteed by Gensec
that has a capital base of around R5-billion.
Gensec Bank strives to be a leading international financial engineering
and capital markets group. Its growth has been driven through
innovations such as:
Being the leaders in the structured products industry in South Africa
Pioneering credit derivatives in the local market
Pioneering the launch of the Satrix index-linked products
Introducing new insurance products
Developing the market for index-linked warrants in South Africa.
Visit our website - www.gensec.com
ISSUED BY: PENELOPE GRACIE INVESTOR RELATIONS
ON BEHALF OF: IMPERIAL HOLDINGS LIMITED
FURTHER INFORMATION: PENELOPE GRACIE
CONTACT: OFFICE +27 (11) 447-3301
MOBILE 082-55-77-444
SAFAIR LEASE FINANCE (PTY) LIMITED, a Sanlam-Imperial company
Established June 2002
The new aviation lease business will grow its assets to at least R5-
billion
50:50 joint venture - Sanlam/Gensec and Imperial Holdings
Sanlam group and Imperial group each contributing a minimum of R400-
million in equity
Equity investment by end financial year 2003
Targeting up to 5 times gearing
Balance of funding to come from capital markets, both local and
international
Funding largely secured
Both Sanlam and Imperial will proportionately consolidate the profits
from the joint venture
Board of directors :
Bill Lynch Chairman
Marius Ferreira Deputy chairman
Ralph Boettger Chief executive
Dave Andrew
Steven de Bruyn
Brian Frankel
Div Geeringh
Johan Latsky
Assets in business
DHL INTERNATIONAL CONTRACT
80-million Euro lease agreement with DHL International for 5 x Airbus
A300-B4 cargo aircraft
Aircraft delivered in March 2002
Leases extend for a six year period
KLM ROYAL DUTCH AIRLINES CONTRACT
US$50-million lease agreement with KLM for
3 x Boeing 737-400s during July
Leases for between seven and eight years
SAFAIR
Started in 1960s
1980s refocused as aircraft lease and charter company
Imperial Holdings acquired from Safren in 1999 for R230-million
Fleet profile - 57 owned aircraft and more than 80 under management
Aviation asset value = R2,3-billion
R205-million operating profit - June 2001
1 028 employees
18 locations internationally
Global aviation industry estimated average annual growth rate over next
decade
Air travel - 4%
Air cargo - 6%
Market asset value of aviation lease market + $75-billion (Jan 2002)
Leased fleet size + 5 750 (April 2002)
Currently operating lease market = 25% of world`s fleet
2012 estimated at 35%
Date: 29/07/2002 01:11:53 PM Produced by the JSE SENS Department
