Nordic Aviation Capital files Chapter 11 bankruptcy in Virginia

By Sarah Lizee

Olympia, Wash., Dec. 17 – Nordic Aviation Capital A/S filed Chapter 11 bankruptcy on Friday with the U.S. Bankruptcy Court for the Eastern District of Virginia.

According to the company’s petition, the board of Nordic Aviation authorized the company to enter into a restructuring support agreement with consenting creditors, a backstop agreement, a debtor-in-possession facility and an exit facility.

In late September, the company announced that it had agreed to the terms of a framework with its largest creditor groups. The framework outlines a comprehensive restructuring of the company’s debt, including converting a substantial amount of the group’s debt into equity, and the company raising $300 million in additional capital through a new equity rights offering, and a new $200 million revolving credit facility.

At that point, the company said the framework remained subject to the finalization of detailed terms, the formal approval processes of the various parties and implementation.

“We are pleased that we have reached this milestone with NAC’s largest creditor groups, who whole-heartedly believe in the long-term future of NAC,” Justin Bickle, vice chairman of Nordic Aviation and chairman of its restructuring committee, had said in the Sept. 24 press release.

“Throughout its 30-year history, NAC has had a fundamentally high performing, profitable business and a strong liquidity position, but like all players in the aviation sector, was not immune to the massive impact of the Covid-19 pandemic and the prolonged recovery period.

Nordic Aviation will also seek court approval to use the cash collateral of its pre-petition secured lenders.

The company listed $1 billion to $10 billion in both assets and liabilities.

Its largest unsecured creditors are PFA Pension, based in Copenhagen, with a $522.97 million unsecured notes claim, Alitalia – Societa Aerea Italiana SpA, based in Rome, with a $2.32 million litigation claim, MTU Aero Engines AG, based in Munchen, Germany, with a $1.42 million trade vendor claim, Pratt & Whitney Canada (SEA) Pte. Ltd., based in Singapore, with a $1.2 million trade vendor claim, Titan International Finance Ltd., based in London, with a $1.09 million trade vendor claim, and Pratt and Whitney Canada, based in Longueuil, Quebec, with a $1 million trade vendor claim.

Kirkland & Ellis LLP is general bankruptcy counsel to the debtor. Kutak Rock LLP is co-bankruptcy counsel. Ernst & Young LLP is restructuring and tax adviser.

The Billund, Denmark-based aircraft leasing company filed bankruptcy under Chapter 11 case number 21-33691.

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