allco assets take off

any chances of noteholders seeing any money?

he receivers of Allco Finance have announced the sale of the collapsed group's aviation business for an as-yet undisclosed amount.

Ferrier Hodgson partners Steve Sherman and Peter Gothard, who were appointed in November, said the sale of the 68-odd aircraft was made to a consortium comprising HNA Group of China and Bravia Capital Partners.

HNA owns Hainan Airlines, the largest private carrier in the People's Republic and other transport and hospitality assets. Bravia Capital is a structured finance and private equity firm based in New York with a focus on the Indian and Chinese markets. Bharat Bhise, Bravia's CEO, used to be a director of Hainan Airlines, while retired Air Marshal J K Seth runs the firm's Indian operations.

"We had a high level of interest in the Aviation business – particularly given the current economic climate – and we are very pleased with the outcome of the sale," said Ferrier's Gothard.

"The complex nature of the business and challenging investment climate meant that this was a difficult sale to achieve. In this respect the sale represents a significant and positive step in the progress of the Allco Group receivership."

According to Tony Boyd, the sale was complicated by former Allco executive David Veal and his reported backer, RAMS founder John Kinghorn. (A spanner in Allco's works, April 2)

Veal is said to have taken control of Allco Australian Holdings, which has legal title to the aircraft, delaying the process. Other parties said to have been interested in the transaction include Bank of China Aviation, Macquarie Group, Terra Firma Capital Partners and Investec. Terra Firma recently bought the Packer family's 90 per cent stake in Consolidated Pastoral (Packer's fertile fields, April 29).

All’s well that ends well however for Ferrier, Allco's creditors and advisers at Citigroup. The sales processed commenced in December with over 100 prospective purchasers being canvassed.

The HNA/Bravia consortium won the tender process however after launching a bid backed by the Agricultural Bank of China.

"The consortium's vision is to create a world-class, diversified equipment and structured finance company, with business focuses in equipment leasing, financing, management, advisory services, and strategic investments," a company spokesman said.

Earlier this year Allco's receivers sold the group's rail assets in North America to GATX Corporation in Chicago and Allco's office equipment leasing business to CHAMP Private Equity. Still on the chopping block are Allco's shipping assets and financial interests and an infrastructure project in the US.