The London-based financing house that backed the $700 million purchase of steelmaker Arrium by Liberty House and stablemate SIMEC has moved into the aircraft financing and leasing market through a deal with Boeing, insurance broker Marsh and a leading Norwegian aviation group.
Greensill, a specialty provider of working capital solutions, has teamed up with Boeing, Marsh and Arctic Aviation Assets, a wholly owned subsidiary of Norwegian Air Shuttle, to deliver a new financing structure for airlines that combines capital markets and insurance.
Norwegian was the first airline to deploy the Greensill aircraft finance structure, for the purchase of six Boeing 737 MAX 8 aircraft between June and August this year.
The structure utilises Marsh’s so-called Aircraft Finance Insurance Consortium launched in June, a non-payment insurance product designed for banks and capital markets investors.
AFIC provides an alternative aircraft finance insurance product for new aircraft deliveries and is underwritten by four leading global insurance companies: Allianz, AXIS Capital, Sompo International and Fidelis.
Greensill believes the capital markets-based funding structure of the deal, using non-payment insurance and global investors, will increase aircraft financing availability and support airline customers around the world.
“The aircraft industry is set to deliver $126 billion worth of planes this year, rising to $185bn by 2020,” Greensill Capital founder and chief executive Lex Greensill said
“The Greensill team is proud to help Norwegian open the skies for the next generation of global travellers.”
Norwegian is Europe’s third-largest low-cost carrier.
“Greensill’s ability to integrate capital, technology and expertise to deliver the right solution for each of our clients is at the core of everything we do,’’ Mr Greensill said.
“Our team launched this product in six weeks, enabling Norwegian Air Shuttle to expand its fleet in record time.”
Raised on his parent’s sugar cane and sweet potato farm in Bundaberg, the Australian-born Mr Greensill moved offshore to develop supply chain finance businesses for firms such as Morgan Stanley and Citi.
In 2011, he founded Greensill Capital and his own bank to provide more capital solutions for business.
In July, Liberty House and stablemate SIMEC used financing support from Greensill to buy the former Arrium operations from administrators KordaMentha for about $700m, after a 17-month administration. The business is now called Liberty OneSteel.
Victorian Business Editor - Melbourne