Swedish ATP Management AB : Status update - indications that asset value may be lower than expected and that the company may not be able to repay the bond in full at maturity without calling on the guarantee provided by LUSAT AIR S.L.
Disclosure of inside information according to Article 17 of the EU Market Abuse Regulation No 596/2014
PRESS RELEASEStatus update - indications that asset value may be lower than expected and that the company may not be able to repay the bond in full at maturity without calling on the guarantee provided by LUSAT AIR S.L. Reference is made to Swedish ATP Management AB (publ) (the "company") SEK 517,178,250 senior secured callable fixed rate bonds 2019/2022 with ISIN SE0012930089 (the "Bond") which are listed on the Frankfurt Open Market.
As part of the restructuring of West Atlantic AB (publ) ("West Atlantic") previous bond during the late summer 2019 certain assets (24 ATP Cargo aircraft together with spares and stock) were transferred from West Atlantic to the company and the company issued the Bonds which were allocated to the holders of West Atlantic's previous bond through a mandatory bond exchange. Since closing of the restructuring, the company has focused on starting to market the aircraft and spares for sale. So far, the company has a few possible leads that the company believes are realistic to potentially become new clients of the ATP Cargo aircraft. This work is on going.
10 aircraft have as agreed in the restructuring documentation been leased back to West Atlantic. Lease agreements for two additional aircraft have been entered into but the lease back will not start until the two aircraft have been made operational by West Atlantic as agreed in the restructuring agreements. The 12 remaining aircraft are parked and there is a plan to make them operational and sell them.
Discussion between the company and West Atlantic regarding the two additional aircraft to be leased back to West Atlantic once made operational have been initiated. The parties are discussing the details of the terms and responsibilities for making the airplanes operational under the restructuring agreements.
The company has since closing of the restructuring also worked to build an understanding of the status of the transferred assets as well as their technical condition and has to that end also hired third party expertise. The company has concluded information indicating that the value of the 10 aircraft that are leased back to West Atlantic are likely in line with the value communicated in the written procedure in relation to the restructuring and other restructuring documentation. With respect to the two additional aircraft where the lease back has not started yet, the company is awaiting a cost estimate from West Atlantic to make those two aircraft operational. The company has also concluded preliminary information that the value of the 12 parked aircraft is likely lower than as estimated and stated in the written procedure and other restructuring documentation, since the cost to make them operational and sellable is probably significantly higher than as estimated. There are several potential reasons to this, but most significantly that components seems to have been removed from the aircrafts over time. Further-more, there are uncertainties as regards the value and condition of the spare parts and stock transferred from West Atlantic.
The above mentioned issues and uncertainties (and certain others related thereto) are now being further investigated and the company has initiated contacts with West Atlantic and its new owner LUSAT AIR S.L. (Spain) to discuss these issues and a potential solution and/or what actions that otherwise should be contemplated. Hopefully such discussions will be forthcoming. Depending on the outcome of such investigations and discussions, and if the indications that the values of some of the aircraft, spare parts and stock are lower than expected and no acceptable solution is being presented by West Atlantic, the company need to consider what actions to undertake. Furthermore, the preliminary findings indicate that the company may not be able to repay the bond in full at maturity, without calling on the guarantee given by LUSAT AIR S.L. (Spain).
More information in relation to the status of the company's operations will be provided in the company's financial report for the period May 3 - September 30, 2019 that will be made available today.
For further information, please contact: Stefan Sundberg, CEO Telephone: +46 70 558 58 65 E-mail: email@example.com
This information is information that Swedish ATP Management AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 2019-11-29, 19.00 CET.
About Swedish ATP Management
Swedish ATP Management is a newly established asset management company dedicated to manage the BAE ATP (Advanced Turboprop aircraft) the most cost efficient cargo aircraft in its segment (8 ton in both metric volume and payload). We aim to increase ATP operations and utilization through our provided services.
Swedish ATP Management AB (publ) Org. no: 559204-4084, Box 5433, SE-402 29 Gothenburg, Sweden, www.atpcargo.com
29-Nov-2019 CET/CEST The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Archive at www.dgap.deLanguage: English Company: Swedish ATP Management AB (publ) Box 5433 40229 Göteborg
Sweden Phone: +46 70 558 58 65 E-mail: firstname.lastname@example.org ISIN: SE0012930089 WKN: A19NPH Listed: Regulated Unofficial Market in Frankfurt EQS News ID: 925313 End of Announcement DGAP News Service
925313 29-Nov-2019 CET/CEST