Singapore-based BOC Aviation could be valued as much as US$6 billion (S$8.3 billion) if it lists on the Hong Kong share market, according to preliminary estimates yesterday.
The aircraft leasing firm, formerly known as Singapore Aircraft Leasing Enterprise, was acquired by Bank of China for US$965 million in 2006. Bank of China said on Sunday that it intends to spin off BOC Aviation in Hong Kong.
Financial news publisher FinanceAsia estimated an overall valuation of US$5 billion to US$6 billion based on the firm's net profit of US$308.6 million last year and its 12-month price-to-earnings range of 15 to 20.
The BOC Aviation figures are based on the trading level of China Aircraft Leasing Corp (Calc), which FinanceAsia noted is much smaller than BOC Aviation's. It said Calc is now trading at 15.15 times trailing earnings and that the stock is down 24 per cent this year. Calc raised US$94 million when it listed in Hong Kong in July last year.
Bank of China, the country's fourth largest commercial bank, said the size of the proposed BOC Aviation listing will not exceed 40 per cent of the enlarged share capital and that it will retain a substantial majority shareholding. Funds raised by the initial public offering will be used for capital expenditure and general corporate purposes.
The firm posted a first-half net profit of US$171.5 million for the six months ended June 30, up 5 per cent from a year earlier.
BOC Aviation has a portfolio of 253 owned and managed aircraft operated by 59 airlines in 29 countries, with commitments to acquire a further 203 aircraft as of Sept 30. The company is based here, with offices in Dublin, London, Seattle and Tianjin.
Ms Claire Leow, its head of investor relations and corporate communications, told The Straits Times that the company will continue to be headquartered in Singapore after the listing. The proposed listing is subject to approval by the shareholders of BOC and the relevant regulatory authorities.