General Electric's (GE) GECAS Unit To Divest PK AirFinance
Zacks Investment Research | Aug 29, 2019 10:17PM ET
The financial services unit of General Electric Company (NYSE:GE) yesterday announced that it agreed to sell its aviation lending business, known as PK AirFinance, to Apollo Global Management, LLC (NYSE:APO) and Athene Holding Ltd. (NYSE:ATH) . Financial terms of the divestment deal have not been disclosed.
General Electric’s shares gained 2.14% yesterday, ending the trading session at $8.11.
It is worth mentioning here that Apollo is a globally renowned alternative investment manager while the other party to the transaction, Athene Holding, engages in providing retirement services.
Divestment Deal
As noted, PK AirFinance is a business within GE Capital’s Aviation Services (“GECAS”) arm. GECAS is a financier and lessor in the aviation industry, offering products, including secured debt financing, operating leases, airframe parts management, purchase/leasebacks, and asset sales and servicing.
PK AirFinance mainly serves financial institutions, airlines, investors, aircraft traders and lessors. It operates in excess of 40 countries. As part of the deal, PK AirFinance’s loan portfolio will be sold to Athene Holding while the aircraft lending platform will be divested to Apollo.
Upon the fulfillment of customary conditions, the divestment of PK AirFinance is anticipated to be completed in the last quarter of 2019.
General Electric’s Restructuring Plans
The above-mentioned transactions are part of General Electric’s plans to reduce exposure to the GE Capital business. In second-quarter 2019, the company disposed of GE Capital’s assets worth $500 million. It seems well-positioned to dispose of assets worth roughly $10 billion in 2019.
Beside this, in June 2018, the company communicated plans to transform itself into a high-tech industrial company, focused on Aviation, Power and Renewable Energy. As part of this plan, it divested GE Transportation to Wabtec Corporation (NYSE:WAB) In February 2019. It will also sell its BioPharma business (part of the GE Healthcare segment) to Danaher Corporation (NYSE:DHR) in the fourth quarter of 2019.
Zacks Rank, Share Price Performance and Earnings Estimates
General Electric currently has a market capitalization of $69.3 billion and a Zacks Rank #3 (Hold). You can see Zacks Investment Research
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