Voyager Aviation, a global aviation investment and commercial aircraft leasing firm, entered into a restructuring support agreement documenting its previously announced agreement in principle with beneficial owners (the consenting noteholders) of approximately 60% of the company’s 8.5% senior notes due 2021 (the existing unsecured notes) and holders of 100% of the company’s equity (the existing equity holders and, together with the consenting noteholders, the consenting stakeholders), formalizing the terms for a debt restructuring transaction that will strengthen the company’s overall financial position and enable the company to focus on growth. Voyager does not anticipate any change in its day-to-day operations or the services it provides to its customers throughout this process.

“We are pleased with the continued collaboration with our consenting noteholders and equity holders and the execution of this agreement. Their support will help position Voyager for future success and we look forward to engaging with more of our financial stakeholders as we commence the exchange,” Mike Lungariello, president and CEO of Voyager Aviation, said. “We are confident that this proposed transaction, along with our new, established owners, sets up our business well for long-term financial stability as the industry recovers from COVID-19 and better positions us to capitalize on future growth opportunities.”

Voyager has a customer base consisting of passenger and cargo airlines that include Air France, AirBridgeCargo, Cebu Pacific, Sichuan Airlines, Turkish Airlines and Alitalia. As of Sept. 30, 2020, the company’s fleet had a weighted average remaining lease term of 6.6 years and there were no scheduled lease maturities until 2022.

Voyager and the consenting stakeholders agreed to support the restructuring through an out-of-court exchange offer, which is expected to launch and close during Q1/21, or, to the extent the exchange offer is not completed, through (i) an Irish scheme of arrangement (the scheme) or, if desired, (ii) a prepackaged plan of reorganization (the plan and, together with the plan, the in-court restructuring), in each case subject to the terms and conditions set forth in the restructuring support agreement.

Under the restructuring support agreement, the terms that the company expects to offer to the holders of the existing unsecured notes in the exchange offer and the in-court restructuring would be, in exchange for 100% of the outstanding existing unsecured notes, including all accrued and unpaid interest thereon:

• 100% of the pro forma common equity of the company (new equity), which will be subject to dilution by a post-restructuring management incentive plan
• Up to $150 million principal amount of new 8.5% senior secured notes due 2026 to be issued by the company (new notes)
• Up to $200 million liquidation preference of preferred equity of an intermediate holding company subsidiary of the company (the preferred units and, together with the new equity and the new notes, the new securities)

In addition, in connection with the restructuring, the existing equity holders would receive a pro rata share of an additional $15 million in aggregate principal amount of new notes to be issued by the company on the date of the completion of the restructuring.
The restructuring support agreement contemplates various conditions to the exchange offer, including, among other things, the negotiation of definitive documentation governing the new securities and a minimum tender condition of at least 95% of the aggregate principal amount of the existing unsecured notes in the exchange offer.

To the extent the exchange offer is not successful, the company is required under the terms of the restructuring support agreement to seek approval from its board of managers to implement the in-court restructuring and, to the extent such approval is received, take all steps reasonably necessary to effectuate the in-court restructuring, which the consenting stakeholders have agreed to support, subject to the terms and conditions of the restructuring support agreement.

Milbank, Moelis & Company and FTI Consulting are advising Voyager in this process. Clifford Chance is advising the consenting noteholders under the restructuring support agreement.