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January 23, 2019 – Further to approved bidding procedures [Docket No. 159], the Debtors notified the Court that they had designated three successful credit bidders in respect of three individual groupings of assets (ie helicopters). The Debtors have eight groupings of assets for sale, WAC 1 (30 helicopters), WAC 2 (6), WAC 3 (45), WAC 5 (9), WAC 6 (7), WAC 8 (9), WAC 9 (17) and WAC 12 (17). Each grouping (and all 160 helicopters) were included in a $650mn stalking horse bid submitted by Macquarie Rotorcraft Leasing Holdings Limited (“Macquarie”), [Docket No. 297]; and each grouping was subject to trumping bids by creditors.
Pursuant to the bidding procedures, Macquarie had until January 22, 2019 to submit a matching bid in respect of any credit bid; but Macquarie declined to do so in respect of the WAC 2 credit bid, the WAC 9 credit bid and the WAC 12 credit bid.
In aggregate, the three sales involved credit bids in excess of $230mn in respect of approximately one quarter of the Debtors’ helicopter fleet; on paper a significant advance over Macquarie’s stalking horse bid. This is likely to further inflame a growing battle over fees (which we cover separately, see Docket No. 254); the U.S. Trustee assigned to the case objecting to the retention of Houlihan Lokey Capital, Inc. (“Houlihan”) as the Debtors’ investment banker, arguing that, “The Application is an attempt on the part of Houlihan to stretch the limits of what are acceptable terms for the retention of a professional in a bankruptcy case.”
The notice states, “Pursuant to the Bidding Procedures, by the Credit Bid Deadline, each WAC Facility Agent was authorized to submit a Credit Bid, in the form of either a Streamlined Credit Bid or a 363(k) Credit Bid, for the purchase of the respective WAC Collateral for which the Lenders represented by such WAC Facility Agent hold a secured interest.
By the Credit Bid Deadline, the Debtors received three Credit Bids from the following WAC Facility Agents: (i) a 363(k) Credit Bid from Wells Fargo Bank, N.A., as WAC Facility Agent for the WAC 2 Lenders (the ‘WAC 2 Facility Agent’, and such bid the ‘WAC 2 Credit Bid’); (ii) a Streamlined Credit Bid from Lombard North Central plc, as WAC Facility Agent for the WAC 9 Lender (the ‘WAC 9 Facility Agent’, and such bid the ‘WAC 9 Credit Bid’); and (iii) a Streamlined Credit Bid from Sumitomo Mitsui Banking Corporation, Brussels Branch, and Sumitomo Mitsui Banking Corporation Europe Limited, as WAC 12 Administrative Agent and WAC 12 Collateral Agent, respectively, for the WAC 12 Lenders (together, the ‘WAC 12 Facility Agents’, and such bid the ‘WAC 12 Credit Bid’)”.
Key Terms of the Successful Credit Bids:
WAC 2 Credit Bid: The WAC 2 Credit Bid is a 363(k) Credit Bid for certain assets of Waypoint Asset Company Number 2 (Ireland) (Limited) (the “WAC 2 Seller”), including, among other things, (i) 100% of the beneficial interests of each of MSN 31431 Trust, MSN 760734 Trust, MSN 920024 Trust, and MSN 920030 Trust; and (ii) aircraft owned by the WAC 2 Seller, related leases and certain other assets of the WAC 2 Seller identified in the WAC 2 Credit Bid. The aggregate consideration provided includes (i) a credit bid of $18,340,000; and (ii) an amount in cash equal to the costs of winding down WAC 2 Seller’s (and its subsidiaries) operations as of the closing date. The WAC 2 Facility Agent will pay all cure costs and assume any liabilities in connection with the assumption and assignment of WAC 2 Seller’s leases, as well as certain other liabilities identified in the WAC 2 Credit Bid. The Debtors will soon file and serve a Supplemental Cure Notice identifying the executory contracts and unexpired leases that the Debtors seek to assume and assign to the WAC 2 Seller and establishing objection deadlines in connection therewith.
WAC 9 Credit Bid: The WAC 9 Credit Bid is a Streamlined Credit Bid for (i) 100% of the equity interests of Waypoint Asset Co 9 Limited and its subsidiaries; and (ii) all profit participating notes issued by the subsidiaries of Waypoint Asset Co 9 Limited being transferred pursuant to the transaction. The aggregate consideration provided includes (i) a credit bid for 100% of the obligations under the WAC 9 credit facility, in an amount not less than $60,464,373.77 and €33,588,431.00 as of the closing date; and (ii) an amount in cash equal to the Exit Payment.
WAC 12 Credit Bid: The WAC 12 Credit Bid is a Streamlined Credit Bid for (i) 100% of the equity interests of Waypoint Asset Co 12 Limited and its subsidiaries; and (ii) all profit participating notes issues by the subsidiaries of Waypoint Asset Co 12 Limited being transferred pursuant to the transaction. The aggregate consideration provided includes (i) a credit bid for 100% of the obligations under the WAC 12 credit facility, in an amount not less than $115,000,000; and (ii) an amount in cash equal to the Exit Payment.
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