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26 Jan 2022

Limerick-based company reaches deal to protect against bankruptcy

New president for aircraft leasing firm amid speculation over its Limerick operations

Nordic Aviation's headquarters at the Gardens International facility in Henry Street

LIMERICK-based aircraft lessor Nordic Aviation Capital (NAC) has announced an agreement to protect against the threat of bankruptcy.

The firm, which employs 70 at the Gardens International complex in Henry Street, has confirmed today it is entering a so-called Chapter 11 bankruptcy protection process in the USA, as part of a deal finalised with lenders owed some €5.6bn.

Nordic is the industry's leading regional aircraft lessor serving almost 70 airlines in approximately 45 countries.

Its fleet of 475 aircraft includes ATR 42, ATR 72, De Havilland Dash 8, Mitsubishi CRJ900/1000, Airbus A220 and Embraer E-Jet family aircraft.

The terms of the deal, the firm hopes, will establish the framework for a comprehensive financial restructuring that will restructure its 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.

It's not clear yet the impact this deal will have on the firm's workforce here in Limerick.

But if its bid to secure Chapter 11 protection is approved by the court, the firm will be able to operate its business as normal.

Crucially, the firm said in a statement: "These motions will also allow Nordic Aviation Capital to continue to honour obligations to its employees, customers, and suppliers on previously agreed upon schedules and terms."

Following its emergence from the Chapter 11 process, the reorganised company 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.

"NAC is taking this proactive step in the U.S. because we believe it is the most efficient and effective way to implement a consensual and comprehensive financial restructuring," said Justin Bickle, vice-chairman of NAC and chairman of its restructuring committee.

"With the strong support we've received from our lenders to date, we are pleased to be entering the Chapter 11 process with a restructuring support agreement in place to implement the financial restructuring of the Group that will position NAC for future growth and success as industry conditions continue to improve."

Martin Moller, former chairman and founder of Nordic Aviation Capital added: "As my 30-year chapter with NAC comes to a close, I am comforted to see the significant support demonstrated by the lenders and their confidence in NAC's business model. I have the utmost confidence in the Company's resilience and ability to continue to serve customers in a sustainable manner throughout this process and beyond."

Nordic is the only tenant currently based in the Gardens International complex at Henry Street, after it opened a number of years ago.

The keypoints of the deal are

- Restructuring will be implemented through a pre-arranged Chapter 11 process in U.S. Bankruptcy Court

- Provides for the injection of $537 million of capital through a $337 million equity rights offering and a $200 million new revolving facility

- Company has obtained an additional $170 million debtor in possession financing facility from existing creditors to help fund the Chapter 11 process

- The deleveraging resulting from the restructuring will place the Company in a strong financial position enabling it to continue global operations

- Company will continue to satisfy substantially all obligations to employees, customers and suppliers as leasing operations and aircraft deliveries will continue in the normal course

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