Nordic Aviation gets approval of disclosure statement, aircraft sale

By Sarah Lizee

Olympia, Wash., March 10 – Nordic Aviation Capital A/S received court approval of the disclosure statement for its Chapter 11 plan on Thursday, according to a minute entry filed with the U.S. Bankruptcy Court for the Eastern District of Virginia.

As previously reported, the debtors began their Chapter 11 cases with support of more than 73% of their $6.3 billion of funded debt.

The debtors had entered into a restructuring support agreement that aims to right-size the debtors’ capital structure by reducing over $4 billion of debt and raising about $537 million of new capital to fund the reorganized business.

The company has continued to negotiate and garner consensus from its key creditor constituencies, and, as of Jan. 13, creditors holding about 88% of the debtors’ funded debt have executed the restructuring support agreement.

The Chapter 11 plan effectuates the restructuring options selected by the applicable creditors that wish to maintain their relationship with the debtors on a going-forward basis, including debt-for-equity options and reinstated debt options and an exit option for creditors that wish to exercise its contractual right to take possession of their collateral.

Specifically, the plan provides for, among other things:

• Implementation of an about $337 million rights offering for new common stock, backstopped by certain holders of NAC Aviation 29 DAC funded debt claims, KfW funded debt claims (claims based on the NAC 2 A/S 2013 facilities and NAC 2 A/S 2014 facilities), leveraged aircraft lease claims arising from KfW aircraft leases and DB Nightjar funded debt claims (all claims based on the NAC 25 facility);

• Equitization of NAC 29 funded debt claims and certain other silo funded debt claims in exchange for the issuance of new ordinary shares to holders of those claims;

• Issuance of NAC 29 take-back debt in the form of a term loan facility or notes fully guaranteed by, among others, Nordic Aviation Capital DAC (NAC DAC);

• Issuance of silo-level take-back debt fully or partially guaranteed by NAC DAC;

• Effectuation during the Chapter 11 cases of a $170 million superpriority senior secured debtor-in-possession credit facility provided by some of the debtors’ exiting prepetition creditors;

• Entry into a $200 million super senior revolving credit facility fully underwritten by some holders of NAC 29 funded debt claims,

• KfW funded debt claims, DB Nightjar funded debt claims and NAC Aviation 3 A/S funded debt claims, or, at the debtors’ election and subject to certain conditions, an alternative exit facility; and

• The consensual exit of certain silos whose creditors wish to leave the Nordic Aviation group through various equitization and recapitalization transactions.

Aircraft sale

Also on Thursday, the company received court approval of a private sale of eight aircraft to American Airlines, Inc. that could bring in around $68 million of proceeds.

The company said the aircraft sales will enable the debtors to avoid incurring the future costs required to maintain the aircraft in a marketable condition or return the aircraft to lease-readiness.

Nordic Aviation said that although it had tried to market the aircraft for re-lease, it didn’t receive any leasing offers from existing or prospective customers. As a result, the company sought an outright sale.

In total, the debtors estimate that the maintenance, repairs and upgrades and related costs required to return the aircraft to a condition ready for lease to another operator would total about $20.75 million or more.

The Billund, Denmark-based aircraft leasing company filed bankruptcy on Dec. 17 under Chapter 11 case number 21-33691.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.