From radio-controlled toy aircraft to Boeing 737s, Lung Cheong International Holdings is certainly making the leap to the big boys.
The 40-year-old Hong Kong-listed toy company will play a pivotal role in mainland aviation conglomerate HNA Group's ambitions to become one of the region's biggest aircraft-leasing operators.
HNA, which bought Australia's Allco Finance Group's aircraft-leasing arm from the financially strapped company in January, will cash in on the recent resale of the leasing operations to Lung Cheong through a complex back-door listing deal.
Under the deal, HNA will gain control of Lung Cheong through the issue of convertible notes. HNA agreed to inject 90 per cent of Allco Aviation and 100 per cent of the much smaller Hong Kong International Aviation Leasing into Lung Cheong for HK$6 billion.
Hong Kong Aviation Capital, the consortium led by HNA, reportedly paid US$150 million to acquire Allco Aviation in January.
'The first step for us is to connect to the capital market and Hong Kong is a natural step,' said Mathis Shinnick, chairman of Hong Kong Aviation Capital. 'By extension, we are looking at getting financing from Chinese banks in Hong Kong.'
