Editorial Comment

VAH completes out-of-court exchange

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VAH completes out-of-court exchange

Voyager Aviation Holdings (VAH), the aviation investment firm and lessor, announced today that it has completed its previously announced exchange offer, with holders of a definitive 98.49% of its existing unsecured notes due 2021 and all of its equity holders supporting the transaction.

The exchange offer to all of the outstanding holders of the $415.337 million of existing unsecured notes, for (i) 100% of the pro forma common equity of the company (new equity), which is subject to dilution by a post-restructuring management incentive plan, (ii) up to $150.0 million of new 8.500% senior secured notes due 2026 (new notes), and (iii) up to $200.0 million liquidation preference of preferred equity of an intermediate wholly owned holding company subsidiary. In addition, current holders of the existing equity interests of the company will receive their pro rata share of an additional $15 million of the new notes in exchange for all of their existing equity interests.

VAH has announced that this out-of-court transaction transfers majority ownership to a “marquee investor group and enables Voyager to pivot to growth at an opportune time as the aviation industry recovers from the impact of COVID-19”. In addition to the conclusion of the exchange offer, the company has rebranded to VAH with a new official logo design.

“We couldn’t have planned for a better outcome of this exchange. As we emerge from this process under the new ownership of well-established and respected firms, we are confident that we are set up for long-term financial stability,” said VAH’s President & Chief Executive Officer, Mike Lungariello. “We’d like to thank all of our financial stakeholders and employees for their support and the belief they’ve shown in our business throughout this process.”

VAH’s global customer base includes Air France, AirBridgeCargo, Cebu Pacific, Sichuan Airlines, Turkish Airlines, and Alitalia. As of December 31, 2020, VAH’s fleet had a weighted average remaining lease term of 6.0 years and there were no scheduled lease maturities until 2022.

The company maintains that its existing airline partnerships and leases, its modern fleet, and the financial impact of this transaction “create a strong foundation for VAH as it looks towards future growth opportunities”.

In connection with the completion of the transaction, a new Board has been appointed.

Alan Alperin has a thirty-year career in the financial services industry. Prior to retiring in 2017, Alperin acted as head of Fixed Income for the Western Region of the US for Credit Suisse for twelve years. He previously worked at Salomon Brothers (later Citibank) and Arthur Anderson.

Marjorie L. Bowen is an experienced public company director with extensive knowledge of corporate governance, capital markets strategies and strategic transactions. She has served as a director for Global Aviation Holdings, a contract freight and passenger airline, and has also served as a director for several companies immediately following a restructuring process. Bowen’s background as an investment banker at Houlihan Lokey is credited as a major benefit for the new company.

Pam Hendry is the Vice President and Treasurer of United Airlines. As a senior aviation finance executive with an extensive background in strategic and cost-effective financing, VAH states that Hendry will bring invaluable insights. Prior to joining United, Hendry spent the majority of her career at International Lease Finance Corporation.

Mike Lungariello is the President and Chief Executive Officer of VAH and has served on the company’s Board since 2017. Lungariello was previously the Executive Vice President and Chief Financial Officer of Intrepid Aviation, the predecessor to VAH, and a member of the executive leadership team of Southern Air.

Hooman Yazhari serves as the Chief Executive Officer of Mobility Capital, an impact aligned investment manager. In his position on the Board, Yazhari will leverage his industry experience, having served as the Chief Executive Officer of the global helicopter leasing company Waypoint, General Counsel & Chief Administrative Officer at CHC Helicopter, and the Senior Vice President & General Counsel of International Lease Finance Corporation (ILFC).

“VAH is thrilled to draw on the leadership of such a high-quality group of Board members as we enter this next phase for our business; I’m looking forward to working with each of them in the days and months to come,” says Lungariello. “The completion of this transaction and our rebranding could not come at a better time. As the aviation industry recovers from the pandemic, we believe airline customers will look towards commercial aircraft leasing companies like ours for support. We are extremely well positioned to capitalize on these future growth opportunities with both existing and new customers.”

VAH was advised by Milbank, A&L Goodbody, Moelis & Company and FTI Consulting. Consenting noteholders under the previously announced restructuring support agreement, dated March 30, 2021, who beneficially owned approximately 60% of the existing unsecured notes as of such date, were advised by Clifford Chance US, and additional consenting noteholders under the Restructuring Support Agreement, who beneficially owned approximately 25% of the existing unsecured notes as of such date, were advised by Skadden, Arps, Slate, Meagher & Flom (UK).