Sumitomo Mitsui and LCI launch $230m joint venture

LCI and Sumitomo Mitsui Finance and Leasing Company (SMFL) have launched a 19-helicopter leasing joint venture. The two companies are co-investors in the $230m vehicle with LCI managing the portfolio.

“We are very much open for business. We are keen to grow this partnership and other vehicles,” says Jaspal Jandu, Chief Financial Officer of LCI told Helicopter Investor. “There are lots of operators that need assets and capital and our message is that LCI is here to help you.”

SMFL is owned by Sumitomo Mitsui Financial Group, one of the world’s biggest banks, and  Sumitomo Corporation, one of Japan’s five largest trading houses.

Like LCI, SMFL is already an experienced investor and arranger of commercial aircraft and aircraft engine leases. The two groups have been in discussions for over a year.

“LCI’s experience, expertise and reputation makes them a natural business partner for SMFL, said Shinichiro Watanabe, Managing Executive Officer of SMFL. “We look forward to working with them and combining our respective financial strengths to jointly and professionally manage a successful and dynamic venture.”

All of the helicopters acquired by the joint venture are on Emergency Medical Services, Search and Rescue, ship pilot transportation and offshore wind farm contracts. LCI says that the helicopters have long average leases and full maintenance programme coverage.

“We are very pleased and proud that LCI has formed a joint venture with such a highly respected organisation,” said George Logothetis, Chairman and Chief Executive of the Libra Group, the parent company of LCI. “This partnership promises sustained and exciting growth for LCI’s rotary wing business, which has already proved highly resilient during the global pandemic.”

LCI launched its first co-investment vehicle in 2019 with Flexam Tangible Asset Income Fund and closed a second one in May 2020 with Thora Capital and RIVE Private Investment.

“Investors looking at the sector appreciate the fact we have many years of proprietary data, digital reporting, and offer a full turnkey helicopter management solution,” says Jandu.  “We see the opportunity for significant growth in this area.”

Jaspal adds: “Our joint venture with this renowned partner highlights the opportunities available in the helicopter leasing marketplace, and demonstrates how these aircraft have now become a proven and attractive asset class.”

The two companies have prepared a video announcing the joint venture: