Watson Farley & Williams Paris (WFW) has advised a group of lessors on the restructuring of the Indonesian airline group, Lion Air. The firm advised the lessors regarding safeguard and receivership proceedings initiated before the French courts relating to the French subsidiaries of the Indonesian airline group Lion Air.
The restructuring, which involved more than 200 aircraft and 50 lessor groups, was necessary to deal with the financial impact of the COVID-19 pandemic on the airline group.
The Lion Air Group engaged its lessors in bilateral discussions to restructure financing arrangements as the COVID-19 pandemic hit, leading to a steady decline in air traffic.
The restructuring involved voluntary collective proceedings in France that started in June 2021 in respect of the Ciel Group of companies. The Ciel Group, comprising several French companies, leases aircraft to the Lion Air Group. The Commercial Court of Paris approved the exit of these companies from the collective proceedings on 14 November 2022.
This consensual and innovative contractual exit made it possible to carry out a €1bn-plus restructuring involving multiple international lessors, while preserving the confidentiality of all individual bilateral agreements.
The Lion Air Group achieved its lease restructurings through bilateral agreements while maintaining the operations of the group airlines. These discussions were led by the team at Transportation Partners and, by the end of September 2022, bilateral agreements were reached with all the Group’s relevant lessors.
Lion Air Group, operates several airlines including Lion Air, Wings Air, Batik Air, Batik Air Malaysia and Thai Lion Air, is a major player in South East Asia with a fleet of 340 aircraft providing up to 630 flights a day.
The WFW Paris Restructuring team that advised the lessors was led by Partner Pascal Roux, supported by Senior Associate Pierre Chipaux, Associate Louise de Vogüé, and Lawyer Chloé Léonard. Partners Alexia Russell and Philippe Wolanski, assisted by Associate Hugues Hounkpati, advised on the financial aspects of the transaction. WFW Hong Kong Assets & Structured Finance Partner Jackson Chow and Associates Alfred Yu and Vivienne Zhao aided in negotiating a bilateral agreement for one of the lessors.