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LONDON (Alliance News) - Avation PLC Tuesday said it has secured a USD16 million finance facility from a "major" European bank to finance two new Airbus aircraft, while Capital Lease Aviation PLC said it has provided a USD8.2 million loan to another Aviation subsidiary and has also set up a standby cash facility with Avation.
In its statement, Avation said the USD16 million pre-delivery payment facility it has secured from the bank will be used to finance two new Airbus A321-200 aircraft that are being delivered in February and March of 2016 and will be leased to Thomas Cook PLC for 12 years. Avation said it has already invested USD8.2 million in this aircraft transaction.
"We continually seek to acquire aircraft with a wide range of finance solutions. The establishment of the PDP finance program provided by the company with the assistance of a major European Bank, is another important step in the group's fleet expansion program," Avation Chairman Jeff Chatfield said in a statement.
Avation is a Singapore-based commercial passenger aircraft leasing company. It currently manages a fleet of 29 aircraft which it leases, through subsidiaries, to airlines including Virgin Australia, Thomas Cook, Condor, Fiji Airways and UNI Air.
One of those subsidiaries is Capital Lease Aviation, which was formed in 2007. It currently owns one Airbus A320-200 and three Airbus A321-200?s which are leased to American and European airlines.
In a separate statement Tuesday, Capital Lease Aviation said it has provided a USD8.2 million loan to "a subsidiary of Avation PLC" although it didn't name the subsidiary. It said the unsecured loan term expires on June 30, but could be repaid earlier at the borrower's option, and the interest rate, paid on a monthly basis, is one month dollar LIBOR plus a margin of 3.95%.
It added that it has also agreed a standby cash arrangement with Avation allowing loans to be made between the two companies up to a limit of USD3 million at any one time at an annual interest rate of 5.5%.
Because the loan and standby arrangement are related party transactions under AIM rules, its independent directors had to consult with nominated adviser WH Ireland and decided that "the terms of the transactions are fair and reasonable in so far as the shareholders are concerned".
Avation shares were up 4.9% at 145.00 pence in London Tuesday morning, while Capital Lease Aviation was down 4.4% at 19.25 pence.
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
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