LUSAT is set to become the majority shareholder in West Atlantic Group (WAG) after its offer was accepted. The Spanish holding firm, which owns Swiftair and Aviation Leasing Spain, entered into talks with the Sweden-based cargo specialist and certain of its major bondholders in March over a refinancing effort.
According to a statement issued on Tuesday, April 9, LUSAT has now signed a Memorandum of Understanding with WAG and its bondholders and, under the terms of the deal, WAG will issue an unspecified number of new ordinary shares to LUSAT for EUR20 million (USD22.53 million). Given the possibility of a hard Brexit on Friday, April 12, the share subscription must take place on or around 10 April. WAG said bondholders also had to give their formal consent to the sale given its impact on the ownership of the firm.
WAG said it will use EUR10 million (USD11.27 million) to partially amortise the bonds at par while the other EUR10 million will be used for capital needs within the Group.
The remaining claim under its existing bonds will be transferred to an SPV entity which will then issue a new bond corresponding to the remaining claim. It will then accede certain assets such as BAe ATP(F) aircraft, WAG's ATP warehouse, rights to payments under certain lease agreements and certain B737-400(F)s, B737-300(F)s, and CRJ(F)s of which the latter will be acquired by LUSAT for EUR25 million (USD28.16 million). This will then be used to amortise the New Bond issued by the SPV.
The SPV will then begin selling off WAG's ATP fleet, proceeds of which will also be used to amortise the new bond.
WAG operates across two AOCs; West Atlantic Sweden which employs four B767-200(F)s, twenty-nine BAe ATP(F)s, and two CRJ(F)s while West Atlantic (United Kingdom) employs six B737-300(F)s, fourteen -400(F)s, and four B737-800(F)s.
