EXCLUSIVE Market Insight: First casualty – ex-AP Møller Mærsk JV goes bust
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National Air Cargo looks set to emerge from Chapter 11 bankruptcy protection.
In filings to a bankruptcy court this month, it has said it could find up to $12m, with $5.4m already sourced for the ‘initial global payment’, in a plan that has been accepted by a majority of creditors.
Some $4m will be funded by insurance proceeds, with National Union expected to pay the airline $3.5m last week and Allied World due to pay out $500,000 this month.
The remainder of the first sum, $1.4m, will come from the sale of four Rolls-Royce engines.
In the filing by CFO Michael Tew, it also specifies that National Holdings has an option to obtain $3.5m in outside funding and a further $1m through a line of credit. Any additional cash required will be provided by the “personal assets of Mr [Christopher] Alf, if necessary,’ notes the court document. National is wholly owned by Mr Alf.
National received revenues of $1.3m in the month of August, leaving it with a $288,000 gross profit. Net income for the month was a loss of $24,800. Mr Alf has earned $1.5m in salary from the airline since it filed for Chapter 11 bankruptcy protection in October 2014.
National originally filed for bankruptcy following a judgment against it in a case filed by Global BTG, which provides leasing and financing for aircraft. Global alleged that NAC had breached a letter of intent by failing to finance aircraft leases through Global.
Global initially objected to the insurance company plan, asking why the money wouldn’t be paid to it directly, and suggesting that the insurance companies were using “smoke and mirrors” over the payment plan.
National appears to be operating smoothly. It is currently booked for four one-way charters from Chicago to Anchorage and Shanghai this week and next, following four previous charters on that route earlier this month.