BOC Aviation Lands Backing of China's CIC, Boeing for IPO

HONG KONG—Aircraft-leasing company BOC Aviation Ltd. has received cornerstone backing for its initial public offering from investors that include China Investment Corp. and Boeing Co.

The Singapore-based company, which is majority controlled by Bank of China Ltd., kicked off its IPO roadshow Monday and has attracted US$583 million from 11 cornerstone investors, according to a term sheet seen by The Wall Street Journal.

The biggest pledge is from Chinese sovereign-wealth fund CIC, which has committed US$100 million to the offering.

Other investors include Chinese private-equity firm Hony Capital Ltd., China's Fosun Group, Fullerton Funds Management—a subsidiary of Singapore state investment firm Temasek Holdings—and Oman Investment Fund, the Sultanate of Oman's sovereign-wealth fund.

BOC said last Thursday it had set a price of 42 Hong Kong dollars (US$5.41) a share for the offering, which would raise $1.1 billion.

Proceeds from the IPO will be partly used to fund the purchase of more aircraft, according to a company spokesman.

BOC International Holdings and Goldman Sachs Group are handling the offering.

BOC Aviation says it has $12.5 billion in assets, 270 aircraft and 62 airline customers in 30 countries, including Cathay Pacific Airways and Qantas Airways.

Bankers regard BOC Aviation as one of the better-quality IPOs in Hong Kong this year, buoyed by Asia's growing aviation sector. Passenger demand is expected to nearly triple by 2035, according to Airbus. BOC Aviation reported a net profit of US$343 million for 2015, an 11% increase from 2014.

Bank of China will retain a controlling stake in the company following the IPO.

China Development Bank Leasing, BOC Aviation's rival, is also planning an IPO in Hong Kong expected to raise roughly US$1 billion, The Wall Street Journal previously reported.

(END) Dow Jones Newswires

May 16, 2016 02:15 ET (06:15 GMT)

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