In an update to the story reported yesterday Doric Nimrod Air One – the new Guernsey-domiciled closed-ended fund – has raised £39,625,000 through the placing of 39,625,000 new shares. Admission of the company’s 42,450,000 shares to trading on the Specialist Fund Market of the London Stock Exchange and the Channel Islands Stock Exchange took place yesterday. Nimrod Capital LLP acted as Placing Agent to the Company. The ISIN number is GG00B4MF3899 and the SEDOL code for the Shares is B4MF389. The shares will trade under the mnemonic DNA.
The Company’s investment objective is to obtain income returns and a capital return for its Shareholders by acquiring, leasing and then selling a single A380-861 aircraft with Engine Alliance GP7200 engines (serial number 016). The aircraft will be leased to Emirates Airlines. A senior secured financing facility, provided by Westpac, in the amount of US$122 million will provide the monies along with the placing proceeds for the acquisition of the Asset. Upon purchase of the aircraft, the Company will enter into a lease agreement with Emirates for an initial term of 12 years, with fixed lease rentals for the duration. The debt portion of the funding will fully amortise over the 12 year term of the Lease, leaving the aircraft unencumbered at the conclusion of the Lease.
So an interesting way for Emirates to fund an aircraft delivery but what is in it for the investor? Doric Nimrod aims to provide shareholders with an attractive total return comprising income from the lease agreement, from distributions through the period of the Company’s ownership of the Asset, and capital, upon the sale of the Asset. The Directors intend to target a gross distribution to Shareholders of 2.25 pence per Share per quarter (after costs and payment of any fees) subject to compliance with applicable laws and regulations. There can be no guarantee that dividends will be paid to Shareholders and, if dividends are paid, as to the timing and amount of any such dividend. It is expected that the first dividend be declared at the end of the Company’s first quarter.
So what if the residual value of the aircraft should fall below expectations? Doric Nimrod will regularly monitor the valuation of the Asset in the market and consider the most appropriate time for the sale of the Asset. If it considers that a more advantageous price may be obtained for the sale of the Asset prior to the term of the Lease expiring, then a shareholder meeting will be convened in order to propose a Liquidation Resolution to Shareholders in such circumstances. Doric Asset Finance Limited has been appointed by the Doric Nimrod to provide asset management and remarketing services.