General Electric's (GE) GECAS Unit Divests PK AirFinance

General Electric Company’s (NYSE:GE) financial services unit, GE Capital, yesterday announced that it successfully completed the divestment of its aviation lending business, PK AirFinance, to Apollo Global Management, Inc. (NYSE:APO) and Athene Holding Ltd. (NYSE:ATH) . Financial terms of the transaction have not been disclosed.

It is worth noting here that General Electric’s share price increased 4.28% yesterday, eventually closing the trading session at $11.44 per share.

Notably, Apollo is a globally renowned alternative investment manager and Athene Holding engages in providing retirement services.

Inside the Headlines

As noted, PK AirFinance is a business within GE Capital’s Aviation Services (“GECAS”) arm. GECAS is a financier and lessor in the aviation industry, offering products — including secured debt financing, operating leases, airframe parts management, purchase/leasebacks, and asset sales and servicing.

PK AirFinance mainly serves financial institutions, airlines, investors, aircraft traders and lessors. It operates in more than 40 countries. As part of the deal, PK AirFinance’s loan portfolio has been sold to Athene Holding while the aircraft lending platform has been divested to Apollo.

In addition, PK AirFinance’s $3.6-billion financing receivables (held for sale in second-quarter 2019) were sold at a higher price than the book value. Notably, certain businesses related to the transaction will be transferred in the first half of 2020, upon receipt of regulatory approvals and fulfillment of some conditions.

General Electric’s Restructuring Plans

The above-mentioned transactions are part of General Electric’s plans to reduce exposure to the GE Capital business. It completed asset disposition worth $2 billion in the third quarter of 2019. The company believes that it is well-positioned to dispose of assets worth roughly $10 billion in 2019.

Beside this, in June 2018, General Electric communicated a plan to transform itself into a high-tech industrial company, focused on Aviation, Power and Renewable Energy. Notably, the company will sell the BioPharma business (part of the GE Healthcare segment) to Danaher Corporation (NYSE:DHR) in the first quarter of 2020.

Zacks Rank, Share Price Performance and Earnings Estimates

General Electric currently has a market capitalization of $95.8 billion and a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

This company’s share price has increased 51.2% so far in 2019 compared with 29.1% growth recorded by the industry.

In the past 60 days, its earnings estimates for 2019 and 2020 have been revised. Currently, the Zacks Consensus Estimate for General Electric’s earnings is pegged at 61 cents for 2019 and 70 cents for 2020, suggesting growth of 1.7% and a decline of 2.8% from the respective 60-day-ago figures.

General Electric Company Price and Consensus