HI Uplift: The lessor of rumoured sales

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by Mike Stones

14 December 2024

Renewed profitability in the offshore helicopter sector has fuelled rumours of a lessor sale. (Photocredit: StockCake).

If the Bloomberg story about the sale of Macquarie Rotorcraft is true, you have to admire the Australian bank, Macquarie Group for running a very confidential process. Very few industry insiders had heard any rumours before the story was published. Bloomberg says the group is looking for $1.2bn.

Macquarie did not wish to comment on the story.

We are hearing talk that four companies have signed non-disclosure agreements to learn more about the business. Macquarie does not appear to be offering itself to established helicopter lessors.

One possible buyer could be Saudi Arabia’s Public Investment Fund (PIF). Saudi Arabia wants to become the leading aviation market in the Middle East and PIF has invested significant amounts in The Helicopter Company. The company has around 65 helicopters now and aims to have a 100-aircraft fleet by the end of 2026. It also acquired helicopter dealer Rotortrade in 2023; so has asset management experience.

Potential homes

PIF would have several potential homes for Macquarie Rotorcraft. The Helicopter Company could create a hybrid operator/lessor similar to Era Helicopters or Macquarie Rotorcraft could become a division of PIF’s commercial aircraft lessor AviLease. AviLease has quickly built a $6bn portfolio and aims to be a top 10 commercial aircraft lessor. AerCap, LCI and Macquarie have all shown how helicopters can fit well with commercial aircraft.

It is also possible that nothing will happen. Macquarie Rotorcraft is trading well and the bank is not a distressed seller.

Macquarie has historically always been a shrewd trader of assets – buying and selling aircraft, rolling stock and engines. In March this year, Macquarie Rotorcraft acquired 12 helicopters from Milestone Aviation.

The underbidder

The bank spent several years in the early 2010s looking at the helicopter market from different angles. It was actually the underbidder for CHC, losing out to private equity firm Clayton, Dubilier & Rice.

When Macquarie Rotorcraft launched in 2013, the bank’s biggest concern was that it would be unable to grow a large enough portfolio to make investing in helicopters worthwhile. The bank had recently sold its $800m aircraft engine leasing business for this reason.

Like LCI, Macquarie was attracted to helicopter leasing after getting frustrated with the competition in the commercial aircraft leasing market. Macquarie Rotorcraft was relatively slow to start, but this was an advantage when the helicopter market crashed in 2015.

When Waypoint Leasing, the second largest lessor went into Chapter 11, Macquarie was able to acquire helicopters at a huge discount on what had been paid months before. This was particularly ironic as the Macquarie was nearly a launch investor in Waypoint.

‘Cash in the chips’

Former Waypoint senior vice president Clark McGinn is not surprised by the Bloomberg story, he told Helicopter Investor: “It’s been a long, hard decade since the oil price crash. Although there are lots of positives in helicopter leasing, it can’t be the A1 gold star in Macquarie’s investment portfolio. So, if they can get a reasonable price, maybe it’s time just to cash in the chips.”

Given recent renewed profits (and stability) in the offshore helicopter market, now is the first time in more than a decade that such a sale is feasible, says McGinn who founded consultancy Uplifting Advice.

So, is the prospect of a Macquarie sale a one-off? McGinn pauses – picking his words with extreme caution (as usual). “I think, like all these deals [and prospective deals] success breeds success, if Macquarie achieved a good exit on this, then who knows, the under bidders might expect a call from other players in the market.”

Meanwhile, here’s the Bloomberg story. We will see if the rumours continue in the New Year. If you enjoy our newsletters please encourage colleagues to sign up here. Thanks.

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