CIT Group Inc. (NYSE:CIT), issued a press release announcing that it has agreed to sell CIT Commercial Air, its commercial aircraft leasing business, to Avolon Holdings Limited (“Avolon”), an international aircraft leasing company and a wholly-owned subsidiary of Bohai Capital Holding Co. Ltd. (“Bohai”), pursuant to a Purchase and Sale Agreement by and among C.I.T. Leasing Corporation, a wholly-owned subsidiary of the Company (“CIT Leasing”), Park Aerospace Holdings Limited, a wholly-owned subsidiary of Avolon, the Company, Bohai, and Avolon (the “Agreement”). The Agreement provides for the acquisition of all of the capital stock or other equity interests of C2 Aviation Capital, Inc., a Delaware corporation and wholly owned subsidiary of CIT Leasing (the “Transaction”). A copy of the press release is attached as Exhibit 99.1 and incorporated herein by reference.
On October 6, 2016, the Company also made a presentation to investors relating to the Transaction, a copy of which is attached as Exhibit 99.2 and incorporated herein by reference.
Amended Capital Plan
The Company announced today that it received a “non-objection” from the Federal Reserve Bank of New York to the Company’s Amended Capital Plan under the 2016 Comprehensive Capital Analysis and Review (“CCAR”). The Amended Capital Plan includes a common equity return to shareholders of $2.975 billion payable from the net proceeds of the Transaction and dividends on common stock totaling $64 million per year after the Transaction is completed. The Amended Capital Plan also includes an additional common equity return of up to $325 million, contingent on the issuance of Tier 1 qualifying preferred stock. The common equity returns are subject to approval of the Board of Directors of the Company (the “Board”) and may be in the form of share repurchases, special dividends, or a combination of the two. The Company’s quarterly dividends are subject to the Board’s approval at the customary times those dividends are declared.
The Company’s management and the Board will determine the timing and amount of any share repurchases and special dividends that may be authorized based on market conditions and other considerations. Any share repurchases may be effected in the open market, through derivative, accelerated repurchase and other negotiated transactions, and through plans designed to comply with Rule 10b5-1(c) under the Securities Exchange Act of 1934.