Why Aviation Leasing Firm AerCap's Shares Are Falling Today

AerCap Holdings NV AER shares are trading lower today following the pricing of a secondary offering of 26.72 million of its ordinary shares by GE Capital US Holdings, Inc., a wholly-owned subsidiary of General Electric Company GE, at a price to the public of $65.25 per ordinary share.

In addition, the selling shareholder has granted the underwriters a 30‑day option to purchase up to 4 million additional ordinary shares.

If the underwriters exercise the option in full, General Electric will cease to beneficially own any of AerCap's ordinary shares. AerCap will not receive any proceeds from the sale of the ordinary shares.

As part of the offering, AerCap will repurchase 7.859 million of its ordinary shares from the underwriters at a price per ordinary share equal to $63.62.

In addition, the company disclosed the acquisition of five General Electric GE90-115B engines from Sanad in UAE.

Sanad is a global aerospace engineering and leasing solutions provider wholly owned by Mubadala Investment Company PJSC (Abu Dhabi's sovereign investor). AER announced the transaction at the Dubai Airshow 2023.

"The addition of these GE-90 engines to our portfolio will enable us to support the strong demand in leasing activity we are seeing from our customers. We thank the team at Sanad for their partnership and look forward to future collaborations between our two companies," said Tom Slattery, EVP AerCap Engines.

Last month, the company reported third-quarter FY23 total lease revenue growth of 7% year-on-year to $1.701 billion, missing the analyst consensus of $1.89 billion. Adjusted EPS of $2.81 beat the analyst consensus of $2.73. 

AerCap held $2.61 billion in cash and equivalents as of Sept. 30, 2023.

Price Action: AER shares are down 2.23% at $66.19 premarket on the last check Tuesday.