A new money injection of about $300 million in the form of debt will be provided to Nordic Aviation Capital, or NAC, as part of its debt restructuring process, sources told Reorg. Workout negotiations are still underway and sources close to the deal are confident that the investment will be finalized.
Continue reading for our EMEA Core Credit team's reporting on Nordic Aviation Capital (NAC)'s debt restructuring process and request a trial for access to reporting and analysis on debt restructuring deals in the region.
Both the company and creditors hope to complete a deal before the ongoing forbearance agreement on amortization payments expires on Sept. 20 with commercial agreements in place among the larger creditors, sources said.Negotiations are focused on a framework proposal envisaging that secured creditors with better collateral will have levels of reinstated debt and take a haircut based on the value of the collateral. Those creditors with less valuable collateral could exchange their debt for equity in the company, as previously
reported. Creditor silos which do not sign up to an agreement, have been provided an exit through a consensual transfer of collateral, according to sources. However, there continues to be disagreement over the value of collateral, sources added.
NAC had previously agreed a shorter forbearance agreement with creditors in the hope of driving negotiations towards the completion of a deal before a recovery in the aviation sector, as
reported.
Chapter 11 bankruptcy is still considered a likely outcome but examinership or an Irish scheme of arrangement have not been entirely dismissed, sources said.
Kirkland & Ellis is acting as U.S. counsel to NAC with a particular remit of exploring the possibility of chapter 11 bankruptcy and will be ready to advise on a filing, sources added.
NAC’s secured lenders have split into two groups with one being advised by Lazard and Milbank and the other working with Moelis and Weil Gotshal. The private placement holders are working with FTI Consulting, Houlihan Lokey and Akin Gump. The shareholders are being advised by PJT and Freshfields while RCF lenders are being assisted by Linklaters and Perella Weinberg. The company is working with Clifford Chance and Rothschild, while Kirkland & Ellis is acting as U.S. counsel to NAC.
-- Thomas Baker, Aurelia Seidlhofer