Arena Investors launches joint venture with Washecka’s Intrinsic Aviation
Investment adviser Arena Investors has formed a joint venture with Intrinsic Aviation to invest in helicopter assets. Intrinsic Aviation was founded by Ed Washecka, former CEO of Waypoint Leasing and Era Helicopters.
The joint venture will lease, trade and part-out mid-life to end-of-life helicopters and has acquired three S76C++s owned by different lenders. One of the helicopters will continue being leased to an oil and gas operator. The other two will be parted-out immediately.
“With the current distress in the sector and uncertainty in markets worldwide, we see opportunities to deploy capital at attractive asset prices and to support an industry traditionally underserved by leasing and creative capital solutions,” says Vivek Nayar of Arena Investors. “We provide capital to nimble, entrepreneurial and aligned partners and are delighted to be working with Ed and Intrinsic Aviation in the helicopter market.”
Arena Investors describes itself: “as a global chaser of illiquidity, we are willing to spend time in places where others aren’t – and have the flexibility to offer financing (and other forms of partnership capital) where others won’t”. It generally originates investments below $50m.
“The helicopter industry has suffered massive dislocation as a result of the prolonged oil and gas downturn, with asset prices falling dramatically for some aircraft types. In an oversupplied market, it sometimes makes more sense to scrap the helicopter and to sell the constituent parts as a means to recover any remaining value,” said Washecka.
RBC Capital Markets acted as financial adviser to Intrinsic with Akerman LLP acting as legal adviser. McGuireWoods LLP acted as legal adviser to Arena.
Washecka believes there are lots of investment opportunities for the joint venture. “With even fewer buyers for helicopters than before Covid19, and more helicopters idle, we see dozens of part-out opportunities. Owners who have been trying (unsuccessfully) to sell aircraft for years can finally realise some cash flow for their asset in a part out scenario.”
He also believes that owners of older helicopters need to recognise the truth about their assets. “For some aircraft models, this is not about a market recovery – the asset type may have reached a point where it has no further useful life. Or the market may be so oversupplied that a return to full utilisation is five or 10 years away. Do you keep trying to sell your old S92 for $5m-6m, with no takers, or do you sell the constituent parts to different operators?”
As a former operator he says he wants to support others during tough markets. “Not all operators need to go through bankruptcy,” he says. “Some may need to consolidate, and some may need to cease to operate, but there are plenty of good ones that just need finance to support their business – and we want to support them.”
Arena Investors describes itself: “as a global chaser of illiquidity, we are willing to spend time in places where others aren’t – and have the flexibility to offer financing (and other forms of partnership capital) where others won’t”. It generally originates investments below $50m.
