Sponsors of Nordic Aviation Capital are considering a new money proposal for the Irish aircraft leasing company, sources told Reorg. While the size and structure of the proposal are still being discussed, any new money into NAC is expected to be mainly used to deleverage the business, sources added. An Irish scheme of arrangement is likely the preferred method of implementing any restructuring.
NAC’s long-term equity shareholders are EQT Partners, KIRKBI Invest, GIC (the sovereign wealth fund of Singapore), and the group’s founder Martin Moller. The shareholders' legal advisor is Freshfields while holders of NAC’s $858.83 million private placements notes are being advised by Houlihan Lokey, FTI Consulting and Akin Gump.
Chapter 11 bankruptcy protection for NAC’s U.S subsidiaries is also being considered,
according to the
Irish Independent. As part of the group’s 2020 Irish scheme of arrangement, NAC
warned that if the scheme was not sanctioned by the court it would file for a chapter 11 bankruptcy in the U.S. The company was advised that the cost of a chapter 11 filing would range from $60 million (on the basis that the enterprise value of the group would be preserved in some form) to $95 million (on the basis of the breakup of the group having first failed to preserve its going concern). Such costs would inevitably reduce recoveries for creditors.
Debt talks between the aircraft lessor and its creditors are expected to focus on a more comprehensive restructuring after the company
secured a standstill on interest and a 12-month deferral on a final maturity bullet payment with following its Irish Scheme of Arrangement. NAC 29 DAC is the issuer of the private placement notes and is also the borrower of most of the company’s unsecured debt. This includes
Schuldschein financing and an $800 million unsecured RCF, among other facilities. Linklaters is advising the RCF lenders.
-- Connor Lovell, Thomas Baker