23 Apr 2021 07:00
NATS (En Route) plc
For Immediate Release
23 April 2021
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION
NATS (En Route) plc (the "Issuer")
£600,000,000 5.25 per cent. Guaranteed Secured Amortising Bonds due 2026
ISIN XS0174424902
(the "Bonds")
RDP decision
Capitalised terms used but not defined in this notice have the same meanings as given to such terms in the intercreditor deed dated 19 March 2003 (as amended, varied, novated, supplemented or amended and restated from time to time including as amended and restated on 11 August 2003, 26 September 2003, 21 November 2005, 31 March 2011 and 15 May 2012 between, among others, the Issuer and Barclays Bank PLC, with a copy to each Senior Finance Party (or their Creditors' Representatives) (the "Intercreditor Deed").
NOTICE IS HEREBY GIVEN that the Regulated Decision set out in the Directions Request delivered by the Intercreditor Agent on behalf of the Issuer to the Senior Finance Parties (or their Creditors' Representatives) on 29 March 2021, in connection with the potential refinancing of the Issuer's existing debt comprising of the Bonds and other secured facilities from commercial banks (the "Refinancing"), has been approved by the Senior Finance Parties.
Trading update
During 2020 and 2021 Covid-19 has continued to present an unprecedented challenge to the Issuer and the aviation sector, in terms of its impact on the demand for air travel and the level of uncertainty for its recovery. The most significant impact has been the continuing shortfall since April 2020 in the Issuer's revenue receipts for its UK En route Service and Oceanic En route Service. This is due to the reduction in air traffic volumes. Whilst the Issuer is significantly protected by the regulatory traffic volume risk sharing mechanism for its UK En route Service, liquidity is impacted in the shorter term due to the deferred nature of shortfall recoveries.
The Issuer has not finalised the preparation of its financial statements for the financial year ended 31 March 2021 but for that financial year the current expectation of the Issuer's management is to report impairment charges and reduced revenue in its results reflecting the continued impact of Covid-19. The Issuer also expects that a reduction in Net Assets will be reported as a result of a material movement in the Issuer's share of the Group's IAS19 funding position on its defined benefit pension scheme from a surplus at 31 March 2020 of £173m to a deficit at 31 March 2021 of around £40m based on unaudited estimated scheme asset values.
Assuming that the impairment charges and reduced revenue adjustments referred to above are made, it will result in the Issuer reporting an accounting loss for the financial year ended 31 March 2021.
Impairment charges, revenue recognition for accounting purposes and IAS19 movements do not affect the Issuer's liquidity or the terms of its licence. IAS19 movements also have no impact on profitability. These matters are subject to review and finalisation by the Issuer and by its auditors.
Important information
Please note that nothing in this document is intended to amount to an invitation or inducement to engage in investment activity. Nothing in this document amounts to the giving of advice. If you are in any doubt as to the action you should take, you should consult a professional adviser.
ENDS
Note to editors: For more information contact the NATS Press Office on 01489 615945 or email press.office@nats.co.uk.
About NATS
NATS is a leading air traffic management and solutions company, established in the UK in 1962 and operated as a partnership principally between the government and The Airline Group Limited since 2001.
NATS handled 2.6 million flights in 2019, before the pandemic, providing en-route air traffic management across the UK and the eastern North Atlantic from its centres at Swanwick, Hampshire and Prestwick, Ayrshire.
For more information visit the NATS website at www.nats.aero