The High Court has approved a scheme of arrangement with creditors for Irish-based aircraft lessor Nordic Aviation Capital.
The company sought the arrangement with lenders due to the dire effects of the Covid-19 pandemic on the aviation industry.
On Tuesday, Mr Justice David Barniville approved the scheme after being told more than 90 per cent of the different classes of the group's creditors had approved the scheme.
Noting the level of approval and the lack of opposition to the proposal, the judge was satisfied he had the jurisdiction to make the order sought, giving international recognition of the scheme, and that the scheme was “fair and equitable”.
The Nordic Aviation group of companies is the largest lessor of aircraft to regional airlines, and the fifth largest aircraft lessor in the world. It employs more than 100 people at its Limerick headquarters and owns approximately 500 aircraft.
Under the scheme, millions of euro in principal and interest payments due from the group to its lenders on more than €5 billion of debt will be put on hold over the next six to 12 months.
Other aspects of the scheme include that Nordic Aviation’s shareholders will inject a total of $60 million into the group, which will reduce non-essential expenditure and cut costs.
The group will also eliminate an uncommitted proposed capital expenditure programme for the next five years of $5.7 billion. Payments under a committed capital expenditure programme of $1.5 billion will also be deferred.
Seeking orders under the Companies Act for the scheme's approval, Lyndon MacCann SC, with Kelly Smith, for Nordic Aviation, said there had been overwhelming creditor support for the scheme.
Well over 90 per cent of secured and non-secured creditors who had attended creditors meetings had voted in favour of the proposals in the scheme, he said.
No party had objected to the scheme, counsel added.
James Doherty SC, who said he represented an “ad hoc group” of creditors that held just under 50 per cent of the group’s secured debt, said none of his client’s opposed the scheme and just over 91 per cent had voted in favour of the proposal.
Brian Kennedy SC said he represented a group holding a total of 69 per cent of the Nordic Aviation's unsecured debt which had "unanimously supported the scheme".
The court previously heard that, unless the scheme got the go ahead, Nordic Aviation feared it would run out of cash by the end of the month.
The bulk of its customers had sought various concessions on its aircraft leasing agreements and the pandemic also resulted in a substantial decrease in the amount of money paid to the group, the court heard.