General Electric said Wednesday it has reached a deal to sell its jet rental business with rival AerCap in a $ 30 billion deal, a move that would create a major development as the aviation industry struggles through disease Covid-19 and GE moves to reduce debt burden.
This agreement would bring GE a 46% stake in the company together and generate approximately $ 24 billion in cash flow for the rally and further reduce it. GE Capital Aviation Services, or Gecas, is part of GE Capital, which has been bankrupt from a financial crisis. GE said it would reduce its debt by about $ 30 billion after the deal closed by using money from the contract and existing money.
GE shares rose 3.5% in pre-sale trading after the deal was announced, while AerCap remained unchanged.
Both companies are major buyers of Boeing and rival Airbus. Gecas owned, serviced or ordered aircraft at the top of 1,600, and had assets worth $ 35.86 billion at the end of 2020. AerCap owned, managed or ordered approximately 1,330 aircraft at the end of last year with assets of assets worth $ 42 billion, according to regulatory filters.
Irish-based AerCap, which owns shares trading on NYSE, had market capitalization of nearly $ 7.27 billion as of Tuesday. Shares are up more than 10% this week since the Wall Street Journal reported on Sunday that the two companies were close to a deal.
The Gecas unit last year lost $ 786 million from a profit of $ 1.03 billion a year earlier, according to GE’s annual report. AerCap posted a net loss of nearly $ 299 million last year from a profit of more than $ 1.1 billion in 2019, through which it had a profit of $ 28.5 million in the fourth quarter.