Proactively and in light of the COVID-19 pandemic, shareholders of Nordic Aviation Capital (NAC), the regional aircraft lessor, agreed to inject US$60 million (€53.5 million) of new equity into the company.
Separately, the company has had constructive discussions with its largest lenders over a possible debt standstill and deferral to counteract the negative impact that COVID-19 has had on the business and to ensure stability as the aviation market gradually recovers. As a result of these discussions with lenders, the company has applied to the High Court in Dublin, launching a Scheme of Arrangement (the Scheme) under the Irish Companies Act.
If approved, the Scheme would be an agreement between NAC and its lenders to standstill and defer the payments of interest and principal on its borrowings, covering the next 6-12 months. It is a mechanism available under Irish law that allows solvent companies to implement arrangements with lenders. It requires court approval and the agreement of lenders voting in classes representing 75% by value and more than 50% by number.
NAC has entered the current global crisis in a strong liquidity position, having recently posted its strongest first-half financial performance to date. It has delivered 23 years of consistent profitability and growth. It owned 500 aircraft as of January 1, 2020 and had shareholders’ equity of US$1.8 billion at June 30, 2019.
As a result of the COVID-19 outbreak and the consequent unprecedented depression of demand for air travel, NAC, in common with its peers, has encountered a large number of lessees deferring lease payments. As a result of this, the company has been liaising with lenders concerning the standstill and deferral of its debt obligations.
The long-term equity shareholders in NAC, EQT Partners, KIRKBI Invest, GIC (the sovereign wealth fund of Singapore) and Martin Moller, its founder and Chairman, have committed US$60 million of new equity as a signal of their confidence in the prospects for the business and their support for its strategy.Email Post to a Friend