The US Internal Revenue Service has lifted its objection to the bankruptcy plan of Limerick-based aircraft rental company Nordic Aviation Capital.
ordic Aviation Capital (NAC) has attempted to resolve less than $6.3 billion (EUR 5.8 billion) in debt by passing it on to lenders.
The US Internal Revenue Service said in a filing April 15 that it was withdrawing its objection to the bankruptcy plan on condition that lenders settle any administrative claims without a request from the IRS.
The IRS filed a last-minute objection to the plan last week for technical reasons.
NAC entered US Chapter 11 bankruptcy proceedings in December 2021, with a final hearing in the case — when a US court in the state of Virginia will be asked to approve NAC’s restructuring agreement with its creditors and debtors — scheduled for tomorrow .
Nordic’s outstanding tax debt is modest at around $250,000.
NAC is the world’s largest lessor of regional aircraft, with a fleet of around 500 aircraft leased to airlines such as Germany’s Lufthansa, Portugal’s TAP and Air France
The landlord has been hit hard by the pandemic, posting a massive $1.2 billion loss last December alone, according to US court filings.
It posted losses of nearly $2.4 billion for the year ended June 2021.
NAC began its bankruptcy proceedings on Dec. 19 after reaching an amicable settlement with lenders who hold more than 73% of the lessor’s $6.3 billion debt.
Under the Chapter 11 procedure, the reorganized entity would be majority-owned by its largest creditors.
The transaction involves a radical restructuring of Nordic’s debt obligations, including the conversion of a significant amount of debt into equity and a US$537 million injection of fresh capital through a US$337 million equity offering and revolving credit facility of $200 million.
The company also received an additional $170 million financing facility from its existing creditors to fund operations during the Chapter 11 process.
Chapter 11 provides protection for businesses from creditors and businesses during debt restructuring.
Unlike the investigator process in Ireland – which could have been an alternative for NAC – companies filing for Chapter 11 bankruptcy do not have to be insolvent to use the process, making it more attractive in some cases.
Nordic said in December that its restructuring plan “will place the company in a strong financial position to continue its global operations” and that it will “continue to substantially honor all of its commitments to employees, customers and suppliers.”
NAC — whose CEO and president is former GE Capital Aviation Services (Gecas) head Norman Liu — recently appointed a number of former senior Gecas executives to top positions as the company navigates its bankruptcy.
This includes Mike Jones, who has been appointed executive vice president of global marketing.
He was previously Executive Vice President of Emerging Markets at Gecas.
Gecas was acquired by Dublin-based AerCap last year, creating the world’s largest aircraft rental company.
https://www.independent.ie/business/irish/irs-relents-over-nordic-bankruptcy-proposals-41562095.html IRS gives in to Nordic bankruptcy filings