Backers agree new $60m investment in Limerick lessor Nordic Aviation Capital

Shareholders of aircraft lessor Nordic Aviation Capital (NAC) have agreed to inject $60 million (€53.5m) of new equity into the company.

Long-term equity shareholders EQT Partners, KIRKBI Invest, GIC (the sovereign wealth fund of Singapore) and Martin Moller, NAC's founder and chairman, committed the investment as a sign of confidence in the business, the company said.

The Limerick-headquartered lessor said it had also had discussions with its largest lenders over a possible debt standstill and deferral to counteract the negative impact Covid-19 has had on the business.

NAC on Friday applied to the High Court in Dublin, launching a scheme of arrangement under the Irish Companies Act that, if approved, will allow for an agreement between the lessor and its lenders to standstill and defer the payments of interest and principal on its borrowings for the next six to 12 months.

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The airline said it entered into the Covid-19 crisis in a strong liquidity position, having recently posted its strongest first-half performance to date.

As of January 1st, it owned 500 aircraft and at the end of its last fiscal year of June 30th, 2019, it had shareholders’ equity of $1.8 billion.

NAC is one of the world’s biggest lessor of regional aircraft, i.e smaller aircraft, mainly up to 100 seats, used for short journeys. Customers include Irish-based Stobart Air, the carrier that provides Aer Lingus’s regional services under contract.

However, the company said a number of lessees had requested lease payment deferrals in recent months due to Covid-19, leading it in return to require the standstill with its own lenders.

"The Covid-19 pandemic has resulted in considerable changes in all our lives and for businesses across the world, in every sector, but particularly for the travel industry. No aircraft lessor is immune," said Soren M Overgaard, NAC's chief executive.

“The anticipation of a prolonged recovery from Covid-19 drove the requirement to undertake this complex engagement process with our lenders. We remain committed to emerging stronger and more robust in the aftermath of the pandemic.”