A German bank asks the court to liquidate the arm of the Irish aircraft rental company
One of Germany’s biggest banks has asked the High Court in Dublin to liquidate an Ireland-based unit of Carlyle Aviation Partners, one of the world’s largest aircraft lessors.
The unit, Victoria Peak Aviation, was previously owned by Fly Leasing, which was acquired last August by Carlyle Aviation. This made Carlyle the sixth largest aircraft lessor in the world, with $10 billion in assets under management. In December, a subsidiary of Carlyle Aviation agreed to buy $4 billion worth of jets from AMCK.
Germany’s Nord LB had issued a notice of default against Victoria Peak Aviation in August last year, but the two sides continued their efforts to reach an agreement over millions of dollars in debt.
Directors of Victoria Peak Aviation include Bill Hoffman, co-founder and chairman of Carlyle Aviation, as well as Robert Korn, co-founder and chairman, and Marcus Miller, vice-president of operations for Carlyle in Dublin.
The only aircraft controlled by Victoria Peak Aviation is valued at around 45 million dollars (41 million euros). The 15-year-old Boeing 737-800 is leased from Chinese airline Hainan Airlines and was recently used by its subsidiary Lucky Air.
Victoria Peak Aviation accounts signed in September last year note that in May 2021 the maturity of its borrowings was extended to August 13, 2021. The company had $21.4 million (19, 6 million euros) of outstanding loans at the end of 2020.
“On August 25, 2021, a notice of default was issued by the lender,” the accounts note. “The installation is without recourse. The repairer, on behalf of the administrators, is currently in discussions with the lender in order to resolve the situation in a way that is economically acceptable to all parties involved.
Nord LB filed its application in the High Court last week and it is expected to be heard in court towards the end of April.
The filings indicate that Nord LB holds encumbrances over the company’s assets that date back a decade.
Although it is not uncommon for leasing companies to become embroiled in lawsuits, these lawsuits are often directed against airlines. It is rarer for lenders to sue and for a lender to seek liquidation of a rental unit indicates that all other efforts to resolve a dispute have failed.
An aviation database indicates that the Victoria-owned 737-800 is currently in storage. The company’s most recent set of accounts reveal that it reached a restructuring agreement with the tenant in April last year, which provided for the lease to be extended until October 2023.
Nord LB did not respond to a request for comment at press time. Carlyle Aviation declined to comment.