Amedeo books $39m reserve for Thai A350 clawbacks
Amedeo Air Four Plus has said it is working with the planners of under-administration Thai Airways to find a mutually beneficial agreement regarding the company’s four Airbus A350-900 aircraft on lease to the Thai flag carrier.
The lessor also has created a contingency reserve of £30 million ($39 million) to repossess and remarket the four widebodies with a potential return to service from 2022.
“We also wish to be in a position where, if negotiations with the Planner about the ongoing use of our aircraft, prove unsatisfactory, we are able to walk away from those negotiations and take back the aircraft. The Board has therefore created a contingency reserve of £30m to cover 18 months interest and funds to allow us to repossess, store, remarket and return to service our aircraft in 2022/23; if such became necessary,” Amedeo Air Four Plus stated in a London Stock Exchange filing.
The London-based company noted that the A350-900 has suffered one of the lowest value declines of all widebodies, telling shareholders it was “focused on preserving your equity investment in these aircraft with a view to weathering the storm, hopefully reaching a satisfactory deal with a renewed and restored Thai Airways”.
Amedeo described repossession as "very much a last resort” and said it “would not look to take such action without the most careful thought”.
The lessor noted that the ambition of Thai Airways’ planners to relaunch the airline in the first quarter of 2021 was “optimistic”, so it is “working on the basis that the timeline needs to be shifted at least two quarters further out and that we will receive little or no income before the end of the second quarter of next year from the Thai leases”.
The four A350-900s were inspected recently and remain in flight-ready mode as opposed to long-term storage.
Amedeo is seeking to extend a previous interest-only payment agreement with Thai Airways for another three-month period.
“Discussions have commenced with the airline around the use of the aircraft with the potential for (limited) income and Amedeo have also arranged with lenders that debt service can be limited to interest only on a three monthly basis and are seeking to extend that arrangement,” said the lessor.
It added: “We therefore anticipate that we may have to fund interest for a possibly longer period from our existing liquidity in a worst-case scenario whilst the rehabilitation process is completed and assuming the lenders are willing to grant principal deferrals for that period in full.”
Security deposits and maintenance reserves associated with the Thai leases amount to $93.3 million.
A syndicate of international banks including Deka Bank, Natixis, Cathay United Bank, Hua Nan Commercial Bank, Mega International Commercial Bank, Philippine National Bank are debt arrangers of commercial loans on three of the aircraft, delivered between July and September 2017, according to Airfinance Journal’s Deal Tracker.
A fourth aircraft, delivered to Thai Airways in January 2018, is financed by Deutsche Bank under a limited recourse facility.
The Amedeo Air Four Plus board last week declared a dividend of £1.15 pence per redeemable ordinary share in respect of the financial year ending 31 March 2021. It said this was to “recognise” shareholders who “have suffered over the last few months by not receiving any income, and we wish to restore this to the extent we can”.