Regional Aircraft Lessor AeroCentury Gets New Owners, Exiting Bankruptcy
New investors have bought US-based aircraft lessor AeroCentury Corp. which is now emerging from bankruptcy under a new CEO who is one of the investors.
The company says in a statement that the new investors have paid US$11 million for shares in the company.
AeroCentury says the transaction has been approved by the US Bankruptcy Court for the district of Delaware and the new investors are: the new CEO Yucheng Hu as well as: Hao Yang, Jing Li, Yeh Ching, Yu Wang, Tongtong Ma, Qiang Zhang, Yanhua Li, and Yiyi Huang.
The new investors now hold approximately 65% of the outstanding shares of common stock of AeroCentury, completing its Chapter 11 restructuring process which allows the company to emerge from bankruptcy, it adds.
AeroCentury’s previous CEO, Michael Magnusson, says the capital investment by investors enables the company to move forward with new capital resources and no debt.
Magnusson says he and other colleagues will remain with the company’s majority-owned off-shoot, JetFleet Holding Corp., and will continue to operate the legacy regional aircraft business under this moniker.
“With proceeds of the plan sponsors’ [new investors] equity investment earmarked to fund the restart of JetFleet’s activities, we are excited to retake our place as a major player in the regional aviation space,” he highlights.
Newly appointed CEO, Yucheng Hu, says he is pleased to complete the transaction and looks forward to enjoying a portion of the growth and development of the company’s legacy aircraft leasing business through AeroCentury’s majority stake in JetFleet.
“We will also be opportunistic and look for additional growth investments in the future to diversify our revenue streams and potential high growth earnings to our shareholders,” he adds.
According to stock site Moomoo.com, Hu has been the founder and CEO of Chengdu Quleduo Technology since 2011. Besides having over 15 years of experience in the internet industry, the entrepreneur has also established a popular online gaming platform in China and other software programming studios as well as social media applications, it says.
The US Securities and Exchange Commission’s website which shows AeroCentury’s quarterly report ending on 30 June 2021 cited the pandemic among other factors that adversely affected the company.
It says some lessees were unable to fulfil in a timely manner their lease obligations during 2020 and requested concessions and deferrals which impacted the lessor’s cash flow. The onset of the pandemic also impeded the company’s ability to regain compliance with its debt covenants, it adds.
As of 31 December 2020, the company’s portfolio consisted of four regional jets and two turboprops, the report notes.
AeroCentury and certain of its subsidiaries eventually filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code to the US Bankruptcy Court in March 2021, it adds.
The report also states that during this year’s second quarter, with the exception of one aircraft that is collateral for a sales-type lease receivable, the company reclassified all of its aircraft to “held for sale” as a result of a sale order approved by the Bankruptcy Court.
In August 2021, the company sold one on-lease regional jet aircraft, three off-lease regional jet aircraft and one off-lease turboprop aircraft to its creditor Drake Asset Management Jersey. Pursuant to an agreement, the sales resulted in the full satisfaction and cancellation of around US$40 million of the Drake Indebtedness, it adds.
Picture Source: aerocentury.com