Knafaim Holdings Ltd. (TASE: KNFM) unit Global Knafaim Leasing (GKL) has completed a deal to purchase an Airbus 330-300 aircraft from an international aircraft leasing company. The aircraft is leased to a European airline, which is a subsidiary of a large international tourism group. This is the seventh airplane that the Israeli company has purchased since the fourth quarter of 2013, as part of its strategic plan to renew and expand its fleet. The lease term, which is the longest in the company's fleet as of today, will end during 2025.
GKL CEO Sidney Slasky said, "This is the fourth aircraft we have purchased during the last year, under our plan to renew and expand our fleet of leased aircraft. The transaction's unique structure, and the cooperation with Rolls-Royce & Partners Finance, underscores GKLs skills and abilities as an innovative player in the international aircraft leasing market. In parallel, we are working towards the sale of a number of aircraft and the extension of several lease agreements of aircraft in our fleet and expect to complete these by the year-end. These actions will continue to strengthen GKL’s future cash flows, liquidity and financial stability."
GKL purchased the Airframe and the engines were purchased by Rolls Royce & Partners Finance. The companies split the acquisition cost with GKL having paid $12 million for the Airframe, and will split the leasing income over the lease term. GKL's investment was funded from its own available funds and GKL will consider other financing sources in the future. To increase liquidity, the company drew the balance of its standby credit facility, in the amount of $7 million, out of a total facility in the amount of $12 million granted to it by an Israeli bank in December 2015.
GKL expects to receive about $16 million of the total lease rental income to be received from the lessee over the remainder of the lease term, which ends in 2025. The lease rentals are fixed and paid monthly in advance and are set to decrease by 6% from 2020.
GKL’s expected lease income from all current lease agreements, including this latest deal, amounts to about $243 million, of which about $55 million is expected over the next 12 months.
Published by Globes [online], Israel business news - www.globes-online.com - on July 26, 2016
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