REG - DP Aircraft I Ltd - Second Amendment and Restatement to Loan Agreement

DP Aircraft IAnnouncement

08/02/2023 07:00

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RNS Number : 2272P  DP Aircraft I Limited  08 February 2023

DP Aircraft I Limited ("the Company")

Company Update: Signing of the Second Amendment and Restatement to the Loan
Agreement

 

As previously announced, the lessee of the Company's two Boeing 787/8
aircraft, THAI Airways International ("THAI"), was placed into a
Rehabilitation Program to ensure its commercial viability following the
unprecedented market disruption caused by the global COVID pandemic.

 

As part of the cost saving measures agreed under the Program, THAI has been
operating its aircraft fleet under a Power by the Hour ("PbH") agreement with
its lessors which enabled the airline to pay solely for hours actually flown.
The lease rental income generated under the PbH period by the Company's
aircraft exceeded expectations. Ongoing costs and interest on scheduled and
deferred loan amounts were paid when due, with the effect that an increase in
the debt burden was avoided, and a cash reserve was instead built up. The PbH
period negotiated between the Company and THAI ended, as agreed, on 31
December 2022 and is now being replaced with new fixed lease rentals of USD
510k per aircraft per month for the remaining lease period.

 

Under the debt arrangements in place between the Company and its lending
banks, modified terms and conditions for the total loan amount outstanding as
at 31 December 2022 have to be negotiated for the period commencing 1 January
2023 until loan maturity in December 2026. The Company has now negotiated
revised terms with its lenders, including the postponement of certain
principal payments, to align the respective loan agreements with the terms of
the amended lease agreements with THAI.

 

In a Second Amendment and Restatement to the Loan Agreement signed on 7
February 2023, the parties agreed on the following main terms:

 

·   the total loan amount outstanding of USD 97.9m will be split into two
tranches:

o Tranche 1 of USD 62.4m (amortizing to a balloon which is dependent on the
fixed   interest rate and still has to be determined) represents the
scheduled debt

o Tranche 2 of USD 35.5m (non-amortizing) represents the deferred debt

·    USD 2.36m of surplus cash generated under the PbH period will be used
to repay debt on the amortizing Tranche 1, while an agreed cash reserve of USD
500k per aircraft will be retained to cover unforeseen costs going forward

·    the interest rate swap currently in place for the scheduled debt will
be dissolved at no net gain or loss

·  Tranche 1 and Tranche 2 will each bear fixed interest rates to establish
reliable and transparent payment schedules and to eliminate the risk of
increasing interest rates. Further details will be provided once both have
been fixed

·   from the monthly lease rental of USD 510k/aircraft, USD 35k per
aircraft will be retained by the Company to contribute to ongoing fixed costs

 

Due to the limited liquidity position of the Company, the lenders have
refrained at this stage from charging the restructuring fees which are
typically associated with the process; instead the lenders will be paid a fee
after the eventual remarketing of the aircraft, subject to surplus sales
proceeds being realized.

 

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

 

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