Nordic Aviation Capital to raise $500m as it nears debt deal

Limerick-based lessor reports $2.3bn full-year loss but says activity has picked up

 

Limerick-based aircraft lessor Nordic Aviation Capital is to raise $500 million (€ 426 million), it said on Friday.

The news comes as the lessor announced former Gecas chairman Norman CT Liu as its new president, and said it had seen a “strong pick-up in placement activity” over the summer.

In a statement, Nordic reported “substantial progress” made in restructuring its debt obligations with its largest creditor.

As part of the restructuring process, the company is to raise $300 million through a new equity rights offering and has secured a $200 million revolving credit facility.

Last year, creditors agreed to shelve repayments on €6 billion worth of debt for 12 months as the business sought to deal with the impact of the Covid crisis.

Shareholders in the lessor include the Lego foundation-controlled Kirkbi, the Government of Singapore Investment Corporation and Scandinavian investor EQT Partners.

“We are pleased that we have reached this milestone with Nordic Aviation’s largest creditor groups, who whole-heartedly believe in the long-term future of (the company),” said Justin Bickle, vice chairman.

Results

Nordic on Friday also released full-year results for the 12 months ending June 30th showing lease revenues of $642 million, down 15 per cent year-on-year.

Material impairments of aircraft and other intangible assets combined with the impact of Covid-19 on the business throughout the year led to a loss of $2.3 billion.

Nordic generated cashflow from operations of $225 million and made investments of $98 million for the year. At year-end it had $233 million in unrestricted cash.

During the reporting period, it said it entered into agreements for short-term rental deferrals with 25 customers on more than 100 leases.

Nordic said it has seen a strong pick-up in placement activity during the summer months, improving on 2019 figures by over 50 per cent. Additionally, lease extensions have increased 45 per cent year-to-date compared to the same period two years ago.