REG - DP Aircraft I Ltd - New Lease Agreements with LOT Polish Airlines

DP Aircraft IAnnouncement

27/03/2025 16:00

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250327:nRSa4816Ca&default-theme=true

RNS Number : 4816C  DP Aircraft I Limited  27 March 2025

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS NOT FOR RELEASE,
PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO, THE UNITED
STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY EEA
STATE (OTHER THAN A MEMBER STATE OF THE EEA WHERE THE COMPANY'S SECURITIES MAY
BE LAWLFULLY MARKETED) OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH
JURISDICTION.

This announcement has been determined to contain inside information for the
purposes of the UK version of the EU Market Abuse Regulation (EU) No 596/2014
which is part of UK law by virtue of the European Union (Withdrawal) Act 2018,
as amended and supplemented from time to time

27 March 2025

DP Aircraft I Limited

 

New Lease Agreements with LOT Polish Airlines

The Board of Directors of DP Aircraft I Limited (the "Group") is pleased to
announce that its two new subsidiaries DP Aircraft Ireland MSN 35320 Limited
and DP Aircraft Ireland MSN 36110 Limited (the "New Subsidiaries") have
entered into new 12-year lease agreements with LOT Polish Airlines ("LOT"),
Poland's state-owned airline, for the Group's two Boeing 787-8 aircraft. As a
result, the Group's UK subsidiary intends to exercise its right to cancel any
extension of its existing lease arrangements with Thai Airways ("Thai") beyond
the existing scheduled lease term which ends in 2026.

Background

In April 2022, a Letter of Intent with Thai was signed to amend the existing
lease terms. Under the revised terms, the lease was structured as a
power-by-the-hour arrangement until 31 December 2022, followed by fixed
monthly lease payments thereafter until October 2026 for aircraft MSN 36110
and December 2026 for aircraft MSN 35320.

The leases also contained possible extensions for an additional three years to
October and December 2029, at reduced monthly payments starting in November
2026 and January 2027. However, with the consent of the Lenders, an option was
retained to early-terminate the extended leases with effect from October and
December 2026 without any extension.

New Lease Agreements

Following an extended period of negotiation, the Group is pleased to announce
that its New Subsidiaries have entered into new lease agreements with LOT,
Poland's state-owned airline, for its two Boeing 787-8 aircraft. The leases
each have a 12-year term, commencing on 29 October 2026 (MSN 36110) and 9
December 2026 (MSN 35320).

Lease rental payments are structured over the 12-year term, with a fixed
monthly rate for the first eight years, followed by a reduced fixed monthly
rate for the final four years, providing rental payments of approximately
US$168m in aggregate over the full term.

As a result of entering into these new agreements, the Group's UK subsidiary
will shortly confirm to Thai its intention to exercise its right to cancel any
extension of the existing leases beyond 2026. Under the terms of the current
lease, Thai will be required to return the aircraft in full-life condition at
the end of the respective lease periods in October and December 2026.

LOT Polish Airlines

LOT Polish Airlines is Poland's flag carrier and one of the world's oldest
airlines still in operation. LOT is wholly owned by Polish Aviation Group, a
Polish state-owned holding company and is a member of the International Air
Transport Association.

Based at Warsaw Chopin Airport, LOT operates an extensive network, connecting
passengers to approximately 100 destinations across Europe, Asia, and North
America. In 2024, LOT achieved a record-breaking year by transporting over 10
million passengers, operating 107,926 flights, and covering a total of 148
million kilometres. As of August 2024, the airline's fleet comprised 80
aircraft, making it the 18th largest operator in Europe.

LOT is a member of the Star Alliance, having joined in October 2003, which
allows it to offer passengers a wide range of global connections. The airline
also has codeshare agreements with various carriers, including Aegean
Airlines, Air Canada, and Singapore Airlines, further expanding its network.

Throughout its history, LOT has been recognized for its service quality,
receiving accolades such as the "Business Traveller" award for the Best
Eastern European Airline multiple times.

Debt Financing Position

The existing debt financing arrangements with the current lenders are set to
expire in October and December 2026, coinciding with the expiration of the
Thai leases. The Group is actively exploring all refinancing options,
including potential agreements with new lenders, and has already received
several indicative proposals. The Board will be evaluating these proposals as
a top priority in the coming weeks.

As at 28 February 2025, the Group had approximately US$81.24 million in
outstanding debt. The total outstanding debt at loan maturity on 31 December
2026 is expected to be US$70 million.

Aircraft Valuation

The aircraft valuations included in the interim results for the six months
ended 30 June 2024, as disclosed in the announcement of 11 November 2024, were
calculated on a lease-unencumbered basis. The independent valuation process
for the annual results to 31 December 2024 is ongoing, and the Board plans to
provide further insight into the potential impact of the new lease
arrangements in the annual report, scheduled for release in April.

Strategy

Following expiration of the Thai leases in October and December 2026, the
aircraft will be approximately 12 years old, and Thai are required to return
the aircraft in a full-life condition. The Board and the Asset Manager believe
that these assets, as well as Boeing 787s in general, remain highly
attractive. Boeing 787 wide body production continues to lag historical
levels, and delays in new aircraft deliveries are further strengthening
demand.

The Board and the Asset Manager remain fully committed to maximising
shareholder value and will continue to evaluate all available options.

 

 

Enquiries

For further information, please contact:

Aztec Financial Services (Guernsey) Limited             +44(0)
1481 748833

Sarah Felmingham / Chris Copperwaite

 

Investec Bank
plc
             +44(0) 20 7597 4000

David Yovichic/Denis Flanagan

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  AGRPKOBQPBKDCNB