Fri 10/30/2020 07:00 AM
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Relevant Documents:
Offering Memorandum
Trading Update April 7
H1 2020 Presentation

Avation’s ad hoc bondholder group has hired law firm Skadden, Arps, Slate, Meagher & Flom for upcoming debt restructuring talks, sources close told Reorg. The group holds a majority of the London-listed aircraft leasing company’s $350 million 6.5% notes due May 15, 2021.

The company is looking for an extension to the maturity date of its notes, sources added. The group has hired PJT as financial advisor and DLA Piper as legal advisor. Continue reading for the Asia Core Credit by Reorg team's coverage of Avation debt restructuring talks and request a trial to follow our coverage of thousands of other debt restructurings.

The terms of offering memorandum prescribe that amendment to the “money terms” of the notes, including date of maturity, require the passing of an extraordinary resolution where quorum is one or more persons holding or representing not less than two-thirds in nominal amount of the notes outstanding.

The ad hoc group includes Arena Capital, Amundi Pioneer and Bluebay, according to sources. Further, San Francisco-based Osterweis holds approximately 25% of the bonds and is supportive of a maturity extension, as reported.

On June 2 and 3, the company bought back £1 million in face value of the notes. The notes are part of the company’s $1 billion global medium-term note program and are currently yielding around 42%. Finance Director Rich Wolanski told investors during a June 1 presentation that the purchase was made from a U.S. bondholder liquidating its position at a price of 76.25 cents. He added that a further $10 million of notes have been purchased by major shareholders of the company.

Avation has two customers currently undergoing court-run administrations - Virgin Australia and Sweden’s Braathens Regional Airlines - representing a total $77 million out of $868 million of future contracted lease revenue. Both filed for administration in April. On May 27 the company was forced to terminate plans for a sale of the business due to Covid-19-related uncertainty.

Avation’s key shareholder is Oceanwood Capital with a 25.16% stake as of March, according to a filing.
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