MUSCAT: Oman Investment Fund has agreed to buy $50 million in the initial public offering of BOC Aviation, the aircraft leasing unit of Bank of China. BOC Aviation attracted investors including Boeing and the Chinese sovereign wealth fund (SWF) to buy shares in its $1.1 billion initial public offering in Hong Kong.
China Investment Corp. and the Silk Road Fund agreed to each invest $100 million in the offering, according to terms for the deal obtained by Bloomberg. Boeing, the world’s biggest planemaker, committed $30 million, and Chinese billionaire Guo Guangchang’s Fosun International will purchase $35 million of shares, the terms show.
Spurred by strong economic growth in the past decade and rising incomes in the world’s two most-populous countries, China and India, Asia is on course to beat the US as the biggest plane-leasing market, according to Airbus Group and Boeing. That potential has lured billionaires such as Li Ka-shing and budget-carrier pioneer Tony Fernandes to the industry, where returns from multi-year contracts can exceed those of airlines. “Aviation is a growth sector, so they are clearly raising capital to fund expansion,” said Zhang Qi, an analyst with Haitong Securities Co. in Shanghai. “Going public is also a way to diversify risks. It would be too risky for a company to just depend on debt and loan instruments alone.”
