Published on December 20th, 2021 | by Alan Dwyer0
NAC Reaches Restructuring Support Agreement with Lenders
Limerick-based Nordic Aviation Captial has entered into a Restructuring Support Agreement with its equity holders and lenders holding over 73% of NAC’s approximately $6.3 billion in debt obligations. The terms of the Restructuring Agreement has established the framework for a consensual and comprehensive financial restructuring that will restructure the Company’s debt obligations, provide additional capital through a new equity rights offering, and best position NAC for future growth and success as global economic and industry conditions continue to improve. To implement the financial restructuring, NAC has filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Eastern District of Virginia.
The Restructuring Support Agreement contemplates a consensual and comprehensive restructuring of the Company’s debt obligations (including the conversion of a substantial amount of the group’s debt to equity) with an infusion of $537 million in additional capital through a $337 million new equity rights offering and a new $200 million revolving credit facility. The Company has obtained an additional $170 million debtor in possession financing facility from its existing creditors to help fund operations during the Chapter 11 process. The additional capital will serve to support the Company’s liquidity position and its plans to pursue growth in purchasing aircraft. Additionally, the Agreement provides the Company with a stable platform to allow NAC to continue satisfying substantially all of its obligations to its employees, customers, and suppliers, as well as provide lease management services and deliver aircraft throughout the Chapter 11 process.
In conjunction with the petitions, NAC has filed a series of motions, which, once approved by the Court, will enable the Company to operate its business in the ordinary course throughout the Chapter 11 process. These motions will also allow NAC to continue to honour obligations to its employees, customers, and suppliers on previously agreed upon schedules and terms.
Following its emergence from the Chapter 11 process, the reorganized NAC will be majority-owned by its largest creditors, who are committed to the Company’s long-term success and will invest substantial new equity capital in the business. Martin Moller, Founder of NAC, and the Company’s existing shareholders are supportive of this transition in ownership. A newly reconstituted Board of Directors will be appointed upon emergence.
Commenting on the announcement was President & CEO of NAC, Norman C.T. Liu who said, “This is a positive first step to position NAC for longer term success and provides financial resources to develop the business. Our aim is to maintain our leadership position in regional aircraft leasing and expand into adjacent single-aisle areas. During the Chapter 11 process, the NAC team will work hard to serve our many airline customers. I would also like to thank our employees for their dedication and our many business partners for their support”.
Also commenting on the announcement, the Vice Chairman of NAC and Chairman of its Restructuring Committee, Justin Burke said, “NAC is taking this proactive step in the U.S. because we believe it is the most efficient and effective way to implement a consensual and comprehensive financial restructuring. With the strong support we’ve received from our lenders to date, we are pleased to be entering the Chapter 11 process with a restructuring support agreement in place to implement the financial restructuring of the Group that will position NAC for future growth and success as industry conditions continue to improve.”
Nordic is the leading regional aircraft lessor serving almost 70 airlines in approximately 45 countries. Nordic’s fleet of 475 aircraft includes ATR 42, ATR 72, De Havilland Dash 8, Mitsubishi CRJ900/1000, Airbus A220 and Embraer E-Jet family aircraft.