Tag: Wealth

GSV Bids $2.5 Billion for Malaysia Airlines

April 7, 2020 / WIL BALDWIN

FILE PHOTO: A Malaysia Airlines plane is seen at Kingsford Smith International Airport in Sydney

KUALA LUMPUR (Reuters) – Privately held Golden Skies Ventures (GSV) has made a $2.5 billion offer to fully take over the holding company of ailing state carrier Malaysia Airlines, with financing from a European bank, its executives told Reuters on Monday.

GSV, which was set up by former Malaysia Airlines officials and professionals with aviation experience, made the proposal a month ago, as airlines around the world were hammered by travel restrictions following the coronavirus pandemic.

“We have secured in excess of $2.5 billion from the bank. We will take about three to four months to get the long-term financing,” Chief Executive Shahril Lamin told Reuters in a phone interview.

GSV said it also has a commitment from a Japanese private equity firm to inject immediate funds into the aviation group through an equity deal.

It declined to name the firms involved, adding it was in talks with other foreign banks and private equity firms for further funding.

GSV has submitted its proposal to Morgan Stanley which has been hired by the aviation group’s sole owner, sovereign wealth fund Khazanah Nasional Bhd.

Sources have previously said Japan Airlines Co Ltd, domestic carriers AirAsia Group Bhd and Malindo Air have shown interest in Malaysia Airlines.

GSV said it would assume most of the airline’s debt that is being held by the government in outstanding Islamic bonds.

Khazanah and Morgan Stanley did not immediately respond to emailed requests for comment.

GOLDEN SHARE

The proposal includes keeping the government’s so-called golden share which allows it majority voting rights and maintains Malaysia Airlines’ flag carrier status.

GSV expects it will have ample liquidity to help the airline operate comfortably for up to 18 months.

It intends to reinstate Malaysia Airlines as a premium long-haul airline by expanding its flight network and maximising utilisation of its 81-plane fleet. It also plans to keep other business units such as the budget airline, cargo freighter and maintenance repair and overhaul unit.

“It’s still a viable venture, it has inherent strengths. We are saying we won’t lay off the 13,000 frontline employees and we are not going to asset-strip the airline,” Deputy Chief Executive Ravindran Devagunam said.

The firm aims to achieve positive earnings before interest, taxes, depreciation and amortisation within three years of taking over, and targets 15 billion ringgit ($3.5 billion) in revenue in 2025.

Plans for a listing or possible listing of its units are on the cards in three to five years, they said.

Ravindran said the firm is banking on pent-up travel demand when the coronavirus is contained. “Regardless of how long (the virus) will take this year, we are looking at an uptick in the business from summer 2021.”

($1 = 4.3450 ringgit)

(Reporting by Liz Lee; Editing by David Holmes and Edwina Gibbs)

Caesars Entertainment and VICI Properties Inc. Announce Sale of Harrah’s Reno

January 15, 2020 / WIL BALDWIN

Caesars Entertainment Corporation (NASDAQ:CZR) (“Caesars Entertainment” or “Caesars”) and VICI Properties Inc. (NYSE:VICI) (“VICI Properties” or “VICI”) today announced they have signed an agreement to sell Harrah’s Reno Hotel and Casino (“Harrah’s Reno”) to an affiliate of CAI Investments (the “Buyer”) for $50 million. The proceeds of the transaction shall be split 75% to VICI and 25% to Caesars, while the annual rent payments under the Non-CPLV Master Lease between Caesars and VICI will remain unchanged.

Under the terms of the agreement, Caesars will continue to operate the property upon closing of the transaction pursuant to a short-term lease with the Buyer, which will allow Caesars to cease operations at the property during the second half of 2020. At the end of the term, Caesars will deliver the property to the Buyer to be redeveloped into a non-gaming hotel and mixed-use development.

“We recognize the long legacy of Harrah’s in Reno, where the brand began 82 years ago and our role in the community. We are pleased the Buyer is committed to the community and supports the redevelopment of this wonderful asset. We have worked closely with the Buyer to provide a reasonable closure plan that allows our great staff in Reno ample time to secure their next jobs, including priority consideration for relevant openings at our other properties in Nevada, including Lake Tahoe and Las Vegas,” said Tony Rodio, CEO of Caesars Entertainment.

“The sale of Harrah’s Reno demonstrates our ability to continuously work constructively with our tenants to improve our individual businesses. This disposition will allow VICI to optimize the quality of our real estate portfolio and redeploy the proceeds toward other attractive growth opportunities while maintaining the existing financial terms of the Non-CPLV Master Lease with Caesars,” said John Payne, President and COO of VICI Properties.

“Being originally from the Reno/Sparks community, it is with great pride that we are investing in the Reno area by redeveloping this property,” said Christopher Beavor, CEO of CAI Investments. “CAI is excited to be working with Gryphon Private Wealth Management as capital partners for the project. Kirk Walton and Philip Oleson, Principals of GPWM Opportunity Zone Funds, which will be investing the required capital for the project, believe in the long-term growth potential of Reno.”

The agreement allows for Caesars to retain its guest data and places no restrictions on Caesars’ marketing activities. Reno will continue to be part of the Caesars Rewards network during the term of the short-term lease with Buyer.

The transaction is subject to the closing of the Eldorado/Caesars combination, regulatory approvals and other customary closing conditions.

Canadian Agency Mandates Onex Meet Ownership Rules on WestJet Deal

December 11, 2019 / WIL BALDWIN

(Reuters) – The Canadian Transportation Agency said on Tuesday Onex Corp will need to amend its by-laws to meet the country’s ownership rules related to its proposed C$3.5 billion buyout deal of Canada’s second-largest carrier WestJet Airlines.

The agency has sought the amendment to Onex’s by-laws to ensure that matters related to WestJet are voted where a majority of Canadian directors are present.

WestJet said it is in the process of reviewing the determination.

Air Canada had challenged Onex Corp’s proposed acquisition of WestJet Airlines, on grounds that the deal may not meet the country’s ownership rules. (https://reut.rs/2LHqQvk)

Air Canada had argued that the likely presence of Onex co-investors such as foreign wealth funds and carriers, and “the opaque nature” of the deal to buy WestJet through company subsidiary Kestrel Bidco, will make it harder to ensure compliance with ownership laws.

Under Canada’s Transportation Act, carriers must be Canadian and controlled by Canadians in order to hold a domestic licence.

Shareholders of WestJet Airlines in July voted in favor of the Onex deal.

Under Canadian rules, foreigners cannot own more than 49% equity in a Canadian airline. The rules further restrict a foreign airline and any single foreign owner from controlling more than a quarter of voting interests in a Canadian carrier.

Onex did not immediately respond to Reuters request for comment.

(Reporting by Arundhati Sarkar in Bengaluru; Editing by Shailesh Kuber and Uttaresh.V)

Qatar Agrees to Buy U.S. Aircraft, Engines, Defense Equipment

July 9, 2019 / WIL BALDWIN

(Bloomberg) — Qatar has made agreements with U.S. companies to spend billions on airplanes and jet engines and to develop a petrochemical complex, the White House said on Tuesday.

At least some of the deals were previously made but were publicly touted by the Trump administration Tuesday. Among them: Qatar Airways purchasing Boeing Co. 777 freighters and large-cabin aircraft from Gulfstream Aerospace, the private jet unit of General Dynamics Corp.

“They’re investing very heavily in our country,” Trump told reporters at the White House. “They’re creating a lot of jobs. They’re buying tremendous amounts of military equipment including planes.

Qatar’s defense ministry committed to acquire Raytheon Co.’s NASM and Patriot Systems, according to the White House. In addition, a unit of Chevron Corp. entered into an agreement with Qatar Petroleum for the development, construction and operation of a petrochemicals complex in Qatar.

The agreements, whose total cost wasn’t disclosed by the White House, were announced during a visit to the White House by the emir of Qatar, Sheikh Tamim Bin Hamad Al Thani.

The deals come amid a two-year economic blockade of Qatar led by U.S. ally Saudi Arabia and supported by nations including Egypt and the United Arab Emirates. Trump initially appeared to support the Saudi move — echoing its assertions that Qatar supported terrorists — even though it put the U.S. in an awkward position because it has a major military base in Qatar.

But Qatar has looked to improve relations in the U.S., with the emir saying the country was committed to doubling the economic partnership between the two countries. Mansoor bin Ebrahim Al Mahmoud, who leads the Qatar Investment Authority, said earlier this year that the country’s sovereign wealth fund will look to increase its U.S. investment portfolio from around $30 billion to about $45 billion over the next two years.

The country has also made significant gestures toward increasing its spending on U.S. defense contractors, with the U.S. approving a large weapons systems purchase ahead of Sheikh Tamim’s last visit to the country. In 2017, the country signed a deal to spend $12 billion for the purchase of 36 F-15QA fighter jets.

And the U.S. has announced plans to expand and renovate the al-Udeid Air Base near Doha, which houses the forward headquarters of the U.S. military’s Central Command and some 10,000 American troops. During a dinner with the leaders on Monday, Trump thanked Sheikh Tamim for Qatar’s $1.8 billion investment in the project which will be used to construct housing and entertainment facilities.

Several companies have released specifics of some of the agreements that were formalized on Tuesday.

Gulfstream said its deal is for $1 billion in corporate jets that General Dynamics announced in January without giving the customer’s name. Boeing said last month it made a deal to sell five 777 freighters at a list price of $1.8 billion.

Qatar Airways plans to use General Electric Co. jet engines for Boeing 787 and 777 aircraft, according to the White House.

A Chevron statement Tuesday said the company was signing a new agreement at the White House for a previously unannounced $8 billion U.S. Gulf Coast project. The White House statement mentions only a prior deal, announced last month, in which the company would join forces with Qatar Petroleum to build a facility in Qatar.

(Story by Justin Sink and Thomas Black, Edited by Alex Wayne, Justin Blum, and Larry Liebert)

Brookfield, GIC to Buy Railroad Owner Genesee & Wyoming

July 1, 2019 / WIL BALDWIN

July 1 (Reuters) – Canada’s Brookfield Asset Management Inc and Singaporean sovereign wealth fund GIC on Monday agreed to buy U.S. freight railroad owner Genesee & Wyoming Inc for about $6.4 billion in cash.

Brookfield and GIC’s offer of $112 per share represents a premium of 12 percent to Genesee’s closing price on Friday. Genesee shares were up about 8 percent in trading before the bell.

Including debt, the deal is valued at about 8.4 billion, the companies said in a statement.

Genesee & Wyoming’s revenue have increased at a compound annual growth rate of 16.8% since it floated in the stock market in 1996, rising to $2.3 billion in 2018 from $77.8 million, according to Genesee & Wyoming’s latest annual report.

The company owns a portfolio of 120 short-line railroads, predominantly in North America, with operations in Europe and Australia.

Reuters had reported on the deal on Sunday, citing sources.

The deal, which is expected to close by year end or early 2020, would be the latest big leveraged buyout by Brookfield, which agreed last year to buy Johnson Controls International Plc’s power solutions business for about $13 billion.

Citigroup Global Markets Inc served as the financial adviser to Brookfield and GIC, while BofA Merrill Lynch and Morgan Stanley & Co LLC advised Genesee.

(Reporting by Ankit Ajmera in Bengaluru; Editing by Anil D’Silva)

Pilot Dead in Manhattan Skyscraper Helicopter Crash

June 10, 2019 / WIL BALDWIN

NEW YORK (Reuters) – A helicopter made a crash landing onto the roof of a midtown Manhattan skyscraper on Monday, killing at least one person and sending a plume of smoke skyward from the top of the building. The person deceased is “presumed” to be the pilot.

The crash occurred shortly before 2 p.m. (1800 GMT) on a rainy, foggy day at the 750-foot (229m) AXA Equitable Center at 787 Seventh Avenue. Dozens of emergency vehicles swarmed the busy area, a few blocks north of Times Square.

The chopper took off from a heliport on Manhattan’s east side and crash-landed on the building 11 minutes later, emergency officials said.

The site is about half a mile from Trump Tower, where U.S. President Donald Trump maintains an apartment. The area has been under a temporary flight restriction since his election in November 2016.

Nathan Hutton, who works in information technology for the French bank BNP Paribas on the 29th floor, said the building shook when the helicopter slammed into the roof.

“It felt like you were just standing there, and someone takes their hand and just shoves you,” he said. “You felt it through the whole building.”

The Federal Aviation Administration said in a statement that the aircraft was an Agusta A109E, a twin-engine, lightweight helicopter. The pilot was the only person aboard, and FAA air traffic controllers did not handle the flight, according to the agency.

The National Transportation Safety Board will investigate the cause of the crash, the FAA said.

Melvin Douglas, 50, who was selling umbrellas on the street, said he heard a “rumble” when the helicopter crash landed.

“I didn’t see it, but I felt it,” said Douglas. “Smoke was on top of the building.”

A fire that broke out on the roof was quickly brought under control, the fire department said. The building was evacuated after the crash.

Trump called New York Governor Andrew Cuomo, who was at the scene soon after the crash, to offer assistance if needed, the governor’s office said.

“Phenomenal job by our GREAT First Responders who are currently on the scene,” Trump said on Twitter after being briefed on the crash. “The Trump Administration stands ready should you need anything at all.”

The AXA Equitable Center was built in 1985 and includes more than 50 floors. A roof helipad is not listed as one of the building’s amenities on its website.

In addition to BNP Paribas, the building houses offices for a number of other corporate tenants, including law firms Willkie Farr & Gallagher and Sidley Austin and investment manager New Mountain Capital. Le Bernardin, one of New York City’s most celebrated restaurants, is also located in the AXA building.

The skyscraper is managed by the Los Angeles-based CommonWealth Partners. Reached by telephone, LeAnn Holsapple, the office manager for CommonWealth, said the company had “no comment at this time.”

Helicopters are a regular sight in the air around Manhattan, and they have occasionally been involved in crashes.

Nearly a month ago, a chopper crashed into the Hudson River in New York City shortly after taking off from Manhattan, injuring two people. A sightseeing helicopter went down in New York City’s East River in March 2018, killing five passengers.

Reporting by Gabriella Borter; Additional reporting by Peter Szekely and Jonathan Allen; Writing by Joseph Ax; Editing by David Alexander and Bill Rigby