Nordic Aviation Capital DAC (NAC) has reportedly signed a Restructuring Support Agreement (RSA) with its lenders and equity holders accounting for more than 73% of the company’s USD 6.3 billion in debt obligations.
Under the terms of the agreement, a framework will be established for a comprehensive and consensual financing restructuring that will revamp the debt obligations of the company, extend additional capital through an offering of new equity rights, and position the company for further growth and success with continuing improvements in the global industry and economic conditions.
To execute the financial restructuring, NAC has filed voluntary petitions in the United States Bankruptcy Court for the Eastern Virginia District under Chapter 11 of the U.S. Bankruptcy Code.
The RSA regards a comprehensive and consensual restructuring of the debt obligations of the company, which includes the conversion of a significant amount of the group debt to equity, with additional capital of USD 537 million through new equity rights offerings of USD 337 million along with a new revolving credit facility of USD 200 million.
NAC obtained an additional debtor of USD 170 million in possession financing facility from its current creditors to help finance operations during the Chapter 11 procedure. The supplementary capital will be used to support NAC’s position of liquidity and its plans to attain growth in purchasing aircraft.
Moreover, the RSA offers a stable platform to the company which allows it to continue fulfilling all of its obligations to customers, suppliers, and employees, offer lease management services, and deliver aircraft throughout the process of Chapter 11.
Along with the petitions, NAC has filed multiple motions. Once these motions receive approval from the Court, it will allow the company to run its business in the general course throughout the process of Chapter 11.
These motions will also let NAC continue honoring obligations to its customers, employees as well as suppliers on terms and schedules that were previously agreed.