Kuwait Finance House and Alafaco, Aviation Leasing & Finance Co. signed an Ijara transaction for a period of 116 months against US$ 70 Million covering the lease of two Boeing aircrafts B737-800, which Alafco has leases in a parallel deal to the Spanish company AIR EUROPA.
Mr. Imad Al-Thaqeb, AGM – Finance Sector – KFH, said that this agreement is the first of its kind between the two parties. It is considered as the start of a new era leading both parties to new horizons following the great success which the company has achieved previously in similar transactions either by means of self finance or jointly with other partners. He indicated that Alafco is one of the companies in which KFH owns 89% .
Mr. Al-Thaqeb added , in a press release following the signing ceremony of the agreement, that the agreement highlights KFH concentration on diversifying its products and transactions with customers on one hand and the explicit growth of qualitative investments in untraditional fields on the other hand. He emphasized that KFH endeavors to provide new forms of transactions to customers, i.e. Ijara, Istisnaa, and other Islamic finance products. KFH is also progressing steadily in investing in new fields, i.e. aircraft finance leasing, through the establishment of funds and the companies working in this field.
Mr. Al-Thaqeb highlighted KFH role in the establishment of MALC Aviation Leasing & Finance with a capital US$ 200 million. The fund is expected to manage US$ 800 million worth assets. The fund currently owns 10 aircrafts leased to major companies in various countries. Also, the fund is finalizing the purchase of 4 aircrafts against US$ 200 Million which are expected to be received later. Also, it has participated in the incorporation of Alafco and increased its capital to ensure the expansion of its activities and business growth in a highly competitive global market
Mr. Al-Thaqeb said that KFH has provided Sharia compliant finance facilities this year to several companies working in various fields i.e. medical, commercial, industrial and real estate companies to assist them in fulfilling their role in strengthening national economy and activating the market.
Mr. Ahmed Abdulla Al-Zaben , Chariman & MD – Alafco, said that the agreement incarnates cooperation among Islamic financial institutions in diversifying investment forms , exchanging experiences and entering new markets and activities with high returns. He idnciated that the two aircrafts Boing B737-800 were leased by Alafco to AIR EUROPA located at Balma. The planes are used in regular and charter flights, being the best type of aircrafts ever manufactured by American Boing Company so far. Aircraft delivery ratio to customers represents one aircraft every three days. More than 1000 Boeing planes were sold since the commencement of service.
He added that the operation of these two aircrafts brings the number of Alafco operating fleet to 9 planes, out of which 4 aircrafts are of the same type. Alafco purchased two aircrafts last year and leased them to the Chinese company Woo Han . Mr. Al-Zaben announced that Alafco is in the process of purchasing 3 more leased aircrafts to achieve higher profit following the decision to increase company’s capital to KD 30 million. This step comes in light of the success and growth achieved by the company during the last period and the positive activity which aviation markets are witnessing currently.