Last checked at 
24 Feb 2021 15:28
24 February 2021
DP Aircraft I Limited (the "Company")
Company Update - Norwegian Air Shuttle
Further to the previous announcements made by the Company regarding ongoing negotiations with both lessees and lending banks, the Board of DP Aircraft I Limited is providing the following update in relation to the two Boeing 787-8 aircraft, LN-LNA and LN-LNB (the "Assets"), leased to Torskefjorden Leasing Limited, part of the Norwegian group ("Norwegian").
As previously advised, the pressure placed upon the aviation industry by the Covid crisis led to Norwegian defaulting last year on its lease payments to the Company in respect of the Assets. Following protracted discussions, the Company agreed new terms in principle with the banks providing loan finance in respect of the Assets (the "NAS Lenders"), and a revised set of lease terms was signed between the Company and Norwegian. Norwegian subsequently announced in January of this year that it was ending its long-haul operations, as a result of which it would no longer have need of the Assets; and it is now in the process of implementing a restructuring plan in an effort to secure further financial support from the Norwegian Government.
The Company, with the advice and assistance of its asset manager DS Aviation GmbH & Co. KG, has been working for a number of months on a plan to position the Assets in a ferry-ready state by October of this year in anticipation that the Assets will need to be re-marketed; and as part of that process, dialogue has continued with the NAS Lenders with a view to securing the necessary financial latitude to allow that plan to come to fruition. The NAS Lenders have however now declared an Event of Default under their loan agreements with the Company's two borrower subsidiaries. This means that the NAS Lenders are entitled to enforce rights under the relevant security documents and take control of the Assets and the recoveries from the Assets, although the course of action has not yet been determined.
The calling of an Event of Default by the NAS Lenders impacts only the lending arrangements in respect of the Assets, which are structured and effected through two wholly-owned subsidiaries of the Company. It has no effect upon the Company's arrangements in respect of the aircraft which it leases to Thai Airways; and there is no recourse by the NAS Lenders to the Company itself. If the NAS Lenders enforce their rights under the relevant security documents, they will therefore take control of the process of disposing of the Assets, with the proceeds of sale (along with relevant aircraft-specific cash balances, claims against Norwegian and shares in Norwegian held as security) being applied in the first instance to pay off any outstanding amounts owed to the NAS Lenders, with any balance remaining thereafter remitted to the relevant subsidiaries of the Company.
The Company remains in the process of finalising a new set of lease arrangements with Thai Airways and the lending banks in connection therewith, and will provide an update on progress made on that front in due course.
For further information, please contact:
Aztec Financial Services (Guernsey) Limited +44(0) 1481 748833
Laura Dunning / Chris Copperwaite