Nordic Aviation Capital Designated Activity Company announced that it has entered into a Restructuring Support Agreement with its equityholders and lenders holding over 73% of NAC's approximately $6.3 billion in debt obligations.
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The terms of the RSA establish the framework for a consensual and comprehensive financial restructuring that will restructure the Company's debt obligations, provide additional capital through a new equity rights offering, and best position NAC for future growth and success as global economic and industry conditions continue to improve. To implement the financial restructuring, the Company has filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Eastern District of Virginia.
The RSA contemplates a consensual and comprehensive restructuring of the Company's debt obligations (including the conversion of a substantial amount of the group's debt to equity) with an infusion of $537 million in additional capital through a $337 million new equity rights offering and a new $200 million revolving credit facility
The Company has obtained an additional $170 million debtor in possession financing facility from its existing creditors to help fund operations during the Chapter 11 process. The additional capital will serve to support the Company's liquidity position and its plans to pursue growth in purchasing aircraft.
Additionally, the RSA provides the Company with a stable platform to allow NAC to continue satisfying substantially all of its obligations to its employees, customers, and suppliers, as well as provide lease management services and deliver aircraft throughout the Chapter 11 process.
In conjunction with the petitions, NAC has filed a series of motions, which, once approved by the Court, will enable the Company to operate its business in the ordinary course throughout the Chapter 11 process. These motions will also allow NAC to continue to honor obligations to its employees, customers, and suppliers on previously agreed upon schedules and terms.
Following its emergence from the Chapter 11 process, the reorganized NAC will be majority owned by its largest creditors, who are committed to the Company's long-term success and will invest substantial new equity capital in the business. Martin Moller, Founder of NAC, and the Company's existing shareholders are supportive of this transition in ownership. A newly reconstituted Board of Directors will be appointed upon emergence. ■