FTAI Aviation internalizes management, pays $150M to terminate agreement.

FTAI Aviation Ltd. (NASDAQ: FTAI) has announced the internalization of its management operations, effectively terminating its management and advisory agreement with FIG LLC. The termination of the agreement involved a significant financial transaction, with the company agreeing to pay $150 million in cash to the manager, along with additional compensation, expenses, and the issuance of 1,866,949 ordinary shares of the company. As a result of this termination, the company has transitioned to being internally managed.

Despite the change in management structure, the leadership team remains intact, with Joe Adams continuing as Chairman of the Board and Chief Executive Officer, Angela Nam as Chief Financial Officer and Chief Accounting Officer, and David Moreno as a senior executive. The company also intends to extend offers of employment to certain other employees of the manager who currently provide services to the company.

The internalization is expected to yield approximately $30 million in initial annualized cost savings, with the potential for significant increases in the following years. Joe Adams, the Chairman of the Board and CEO, expressed confidence in the company's capabilities and its long-term growth and success, emphasizing the immediate cost savings and value creation for shareholders.

Following the internalization, a transition services agreement was established, stipulating that the manager will provide all the services it previously offered to the company for a transition period. Additionally, the company is required to make certain employees available to provide specific services to the manager during this period.

Prior to the internalization, FTAI Aviation Ltd. was externally managed by the manager, an affiliate of Fortress Investment Group LLC. The internalization was approved after negotiations by a special committee composed entirely of independent and disinterested directors, with the support of financial and legal advisors.

FTAI Aviation Ltd. is known for owning and maintaining commercial jet engines, focusing on CFM56 and V2500 engines. The company's product portfolio, including the module factory and a joint venture to manufacture engine PMA, allows it to provide cost savings and flexibility to its customer base. FTAI also invests in aviation assets and aerospace products, aiming to generate strong and stable cash flows with the potential for earnings growth and asset appreciation. As a result of these announcements, the company's shares have moved 0.1% on the market, and are now trading at a price of $84.55. For more information, read the company's full 8-K submission here.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.

IN FOCUS