West Atlantic proposes bond amendments, waivers to allow plan delivery

By Caroline Salls

Pittsburgh, Jan. 16 – West Atlantic AB reached an agreement under which a committee of larger bondholders agreed to vote in favor of proposed bond amendments and waivers that are designed to support company management in delivering a plan to improve the group’s financial position and put it on a path toward “sustainable and profitable long-term growth,” according to a news release.

West Atlantic said its management has continued to work over the past weeks on a comprehensive plan.

As part of these efforts, the company said a number of initiatives have been identified, including preferable amendments and waivers to the terms and conditions of the bonds.

Specifically, West Atlantic said the amendments and waivers permit Svenska Handelsbanken or any replacement bank to, in its capacity as provider of the group’s working capital facility, share the transaction security provided under a bond loan, with the bank ranking ahead up to a maximum of SEK 75 million.

The waivers and amendments would also allow the dismantling of up to six long-time parked pledged ATP-aircraft to be used as spare parts in the operating fleet.

West Atlantic said this would, over a period of two to three years, realize liquidity savings of SEK 5 million to SEK 10 million per dismantled aircraft by using the spare parts in the operating fleet.

Finally, the amendments and waivers would allow the release of the remaining escrow amount, to be used to finance the business growth of the group, in connection with a new B737-800 fleet.

The company said it will shortly call for a notice to written procedure in order to receive the bondholders’ formal approval of the amendments and waivers.

West Atlantic said having the amendments and waivers formally approved will have a positive impact on the liquidity of the group and will contribute to capital growth opportunities.

Once the amendments and waivers are approved, the company said some shareholders agreed to contribute SEK 25 million in equity to the group, and the amendments and waivers will be subject to the occurrence of that equity contribution.

The company said it will continue the work in the first quarter to find a new long-term majority owner.

In addition, West Atlantic said it informed the bondholder's committee that it signed a letter of intent for a five-year contract that gives rise to estimated annual sales of more than SEK 200 million once fully implemented.

The group said it also expects to receive during the fourth quarter of 2017 and the first quarter of 2018 a total of SEK 70 million from the sale of aircraft not required for daily operations, including from the group’s collaboration agreement portfolio.

During the fourth quarter, the group received a SEK 15 million payment from one aircraft transaction.

West Atlantic Group is a Gothenburg, Sweden-based provider of European air freight services.

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