Daily News: January 17, 2014

Teneo/Morgan Stanley Advise LCI Helicopter in KKR/Lease Corp. Investment

Lease Corporation Intl., a Libra Group company, and KKR Financial Holdings announced they entered into a definitive agreement under which KFN agreed to invest in excess of $100 million in LCI Helicopters Ltd in exchange for a minority stake in LCIH’s common equity. The strategic investment will allow LCIH to grow its fleet significantly and advance its leadership position in the rapidly expanding helicopter leasing business.

Teneo Capital and Morgan Stanley & Co. acted as financial advisors to LCI.

“This transaction deepens our already significant commitment to the rotary wing sector of the aviation market,” said LCI CEO Michael Platt. “Our partnership with KKR Financial will provide us with future growth opportunities and further strengthen our position in the marketplace.”

To date, LCIH has supplied helicopters to several global operators, including Avincis Group, the world’s leading provider of mission-critical services; Weststar Aviation Services, one of the largest providers of offshore helicopter transportation to oil and gas companies in the Southeast Asia region; and Thailand-based SFS Aviation. The company’s aircraft are engaged in diverse applications, from oil exploration in the Gulf of Thailand to offshore services off the coast of Africa to crew transportation in the North Sea. LCIH has a robust pipeline both of lessees and additional helicopter orders that will be announced in 2014.

“We are pleased to be partnering with LCIH to help grow its helicopter leasing business,” said Craig J. Farr, CEO of KFN. “As a result of related experience through other KKR investments &mdash both in the helicopter space and in the end-markets LCIH serves, such as offshore energy production &mdash we believe the nascent helicopter leasing industry will offer attractive risk-adjusted returns to early entrants like LCIH in the years to come. With banks more focused on lending against short-lived liquid assets, we continue to see opportunities to put KFN’s long-term capital to work alongside proven specialty finance teams like LCIH management.”

LCI entered the helicopter leasing business in February 2012 through LCIH and has since been active, with a $400 million order for a fleet of modern, versatile AgustaWestland AW139, AW169 and AW189 helicopters. The helicopters are being delivered to LCIH over a five-year period and will be deployed to a range of offshore, search & rescue and other applications. The company intends to expand its fleet significantly with orders from other leading helicopter manufacturers.