- Reuters / Brendan McDermid
- General Electric‘s aircraft leasing unit is being eyed by the alternative-asset-manager Apollo Global Management, a report said.
- Apollo has met with lenders to secure about $30 billion in financing to purchase GE Capital Aviation Services, which could be worth as much as $40 billion.
- A sale would raise considerable capital for cash-strapped GE, which recently sped up efforts to reduce debt by selling assets.
- Watch General Electric trade live.
General Electric rallied as much as 3.16% to $8.49 a share before Monday’s opening bell following news that Apollo Global Management is eyeing its aircraft-leasing unit.
The New York-based alternative-asset manager has met with lenders to secure about $30 billion in financing to purchase GE Capital Aviation Services, which could be worth as much as $40 billion, Bloomberg reported Friday, citing sources familiar with the matter.
No deal is imminent and GE may opt to keep the business, which has drawn interest from other potential buyers, Bloomberg’s sources said.
The leasing unit, known as GECAS, is an Irish-American commercial-aviation leasing company and the world’s top plane lessors by the number of aircraft. GECAS owns or services a fleet of nearly 2,000 aircraft, according to the company’s website.
A sale would raise considerable capital for cash-strapped GE. The iconic American industrial company has been questioned by Wall Street about its liquidity. Goldman Sachs said in November that General Electric’s lending arm, GE Capital, has to fill a $20 billion funding gap.
To increase investor confidence, GE’s management has sped up efforts to reduce debt by selling assets. In November, GE announced plans to expedite efforts to sell a $4 billion stake in the oil-field-services provider Baker Hughes. Additionally, its finance arm, GE Capital, sold a $1.5 billion healthcare-equipment finance portfolio to the US lender TIAA Bank.
And last month, General Electric said its digital unit would sell a majority stake in ServiceMax, a software provider, to the technology-focused private-equity firm Silver Lake. GE is also taking steps to spin off its health-care unit to narrow its focus on building jet engines and power equipment.
GE had a tough year in 2018, losing more than half of its value, but entered the new year with a monster rally, up 6.25% so far.
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