this comes via Raging Bull HRCT board...same company?...
MK Aviation, S.A., Aircraft Leasing
Hartcourt is scheduled to sign an agreement on July 7, 1998, to acquire MK, formerly the world's 5th largest Aircraft Leasing Company. MK currently leases primarily aircraft engines, but has in the past owned and leased many
large commercial jet aircraft. Hartcourt's CEO, Alan Phan, was an employee of MK from 1981 until the early 1990s, serving as an executive officer of the corporation. MK's revenue in 1997 was $33 million, with a net after-tax
profit of $1.6 million. Currently, the Company is on-track to produce revenue of approximately $40 million in 1998. MK Aviation has net assets of approximately $10 million, mostly in the form of commercial jet aircraft engines which are leased to major airlines around the world. The aircraft leasing industry is relatively new, beginning in the late 60's and early 70's. Companies such as Guinness Peat Aviation (GPA), and GE Capital (formerly Polaris) developed the industry to a $12 -to- $15 billion dollar industry. MK Aviation had leasing revenue of over $600 million in
the mid-1980's. Aircraft leasing companies purchase mostly used aircraft and components (engines) that are 10 -to- 15 years old having achieved a stable depreciable value, and lease them to major airlines across the globe. The asset is moveable so if the market is bad in Asia, the planes can be
moved to Europe or the U.S. and leased there. In addition, maintenance is government mandated and regulated, so the asset generally has a very long life, with low depreciation due to the age of the original asset. During the period from 1985 to 1990, an aircraft glut dramatically reshaped the industry, and MK scaled back its operations. The current owner of MK semi-retired during this period, allowing sales to decrease to current levels by the early 1990's, where they have remained. Hartcourt management
believes that MK can produce as much as $400 million in revenue annually within the next 2 years (by year-end 1999 or mid-year 2000), with an after tax profit of between 1.5% -to- 3%. MK is being purchased for $10 million,
mostly stock.
