Commercial passenger aircraft leasing company Avation PLC (LON:AVAP) is on course to net a windfall of US$31mln after it confirmed the sale of six planes to Chorus Aviation Inc (TSE:CHR).
Back in March, Avation told investors it was in discussions to sell of the ATR 72-600s, and those talks have now materialised into a definitive sale and purchase agreement.
The deal remains subject to Chorus arranging the necessary bank finance as well as other conditions, but the transaction is expected to go through before the end of June, as Avation had said before.
Assuming the sale goes ahead as planned, Avation will use the cash to add more planes to its current portfolio, which it says will help to diversify and de-risk the business.
“We are pleased to have progressed our strategy to further diversify our fleet,” said executive chairman Jeff Chatfield.
“The value rationale for this series of transactions is the release of equity, which can be reinvested for growth, as well as the creation of an opportunity to diversify Avation's customer base.
“The company believes that improving airline customer diversification mitigates overall risk and therefore improves Avation's credit metrics.”
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Last October, Avation told investors it had received an expression of interest in its 22-strong ATR 72 portfolio, with seven more offers from different buyers coming in soon after.
It went away and considered what would be the best move for the company going forward and decided that selling a smaller portion of the portfolio made most sense.
Avation shares were down 0.5%, or 1p, to 200p on Monday afternoon.