31-Jan-2006 9:29 AM
Morgan Stanley sells aircraft-leasing business
Analysis
NEW YORK (XFNews) -- After seeking a buyer for months, Morgan Stanley is selling its aircraft leasing business to European private-equity firm Terra Firma for $2.5 billion in cash, the companies said Monday.
Morgan Stanley , which had recorded a $1 billion charge last year in writing down the value of the unit, said it will reduce that amount by between $500 million and $550 million. The revision will be included in the company's annual report to the Securities and Exchange Commission.
The unit had revenue of $1.7 billion in the fourth quarter and $5.2 billion for 2005.
"AWAS is a strong business with superb management, but it does not fit our strategy," said John Mack, Morgan Stanley's chief executive, in a statement.
The deal, subject to regulatory approval, is expected to close in the first half of 2006. Morgan Stanley recorded a $1 billion after-tax write-down of the unit's value in the third quarter of 2005.
Terra Firma, based in London, owns East Surrey Holdings, a major gas supplier in Northern Ireland, Waste Recycling Group and Odeon Cinemas. The deal is being funded by equity and debt provided by J.P. Morgan Chase & Co. .
Shares of Morgan Stanley rose 81 cents on Friday to close at $60.78.