newstodate.aero
Nov 07, 2017 (newstodate): The Swedish/UK carrier West Atlantic is striving to keep afloat despite a weak financial performance in 2017.
During 2017, the company has reported negative results, to a great extent due to high start-up costs caused by delayed deliveries of aircraft for the new Royal Mail contract, which is the company's largest contract ever.
Delivery delays have forced West Atlantic to sub-charter aircraft from other airlines, incurring double the cost for many items during the period January-September 2017 as reported in the Q1 and Q2 interim reports.
Consequently, the company does not fulfill the "Maintenance Test" as per September 30, 2017 as stipulated in The Terms and Conditions of the company's corporate bond loan.
And it can now be foreseen that the company may also not be able to pass the next forthcoming Maintenance Test.
As a preventive measure, West Atlantic is now asking its creditors to keep calm and stay cool.
-While a return to operational profitability is expected during the fourth quarter of 2017, the Issuer cannot be certain that it will be in compliance with the Maintenance Test as at 31 December 2017. Consequently, the Issuer will request that the Holders temporarily waive the Issuers undertaking of the fulfillment of the Maintenance Test as set out in the Terms and Conditions, says the company in a new release.
In the meantime, West Atlantic is taking measures to fight against the drought in equity and liquidity.
Among other initiatives, the management has decided to close the Groups hangars in Malmo and Coventry by the end of the year.
-In addition, the Issuer is expecting to conclude the sale of minimum two of its excess ATP aircraft during the fourth quarter of 2017, with further disposals to follow in 2018. The company, therefore, does not foresee any immediate consequences for the daily operation or its ability to pay its debtors but further material negative deviations from plan would potentially cause a risk for the Group to service its debts, the release reads.
During 2017, the company has reported negative results, to a great extent due to high start-up costs caused by delayed deliveries of aircraft for the new Royal Mail contract, which is the company's largest contract ever.
Delivery delays have forced West Atlantic to sub-charter aircraft from other airlines, incurring double the cost for many items during the period January-September 2017 as reported in the Q1 and Q2 interim reports.
Consequently, the company does not fulfill the "Maintenance Test" as per September 30, 2017 as stipulated in The Terms and Conditions of the company's corporate bond loan.
And it can now be foreseen that the company may also not be able to pass the next forthcoming Maintenance Test.
As a preventive measure, West Atlantic is now asking its creditors to keep calm and stay cool.
-While a return to operational profitability is expected during the fourth quarter of 2017, the Issuer cannot be certain that it will be in compliance with the Maintenance Test as at 31 December 2017. Consequently, the Issuer will request that the Holders temporarily waive the Issuers undertaking of the fulfillment of the Maintenance Test as set out in the Terms and Conditions, says the company in a new release.
In the meantime, West Atlantic is taking measures to fight against the drought in equity and liquidity.
Among other initiatives, the management has decided to close the Groups hangars in Malmo and Coventry by the end of the year.
-In addition, the Issuer is expecting to conclude the sale of minimum two of its excess ATP aircraft during the fourth quarter of 2017, with further disposals to follow in 2018. The company, therefore, does not foresee any immediate consequences for the daily operation or its ability to pay its debtors but further material negative deviations from plan would potentially cause a risk for the Group to service its debts, the release reads.