Avation PLC (LSE:AVAP) (LSE:AVAP) said there is a high level of confidence that a US Chapter 11 restructuring of customer Philippine Airlines (PAL) would be approved – a move that would provide future certainty around a Boeing 777-300ER leased to the carrier.
A successful restructuring would ensure that Avation's aircraft remained with PAL and that the UK-listed group would recommence collecting cash rent on the aircraft for the first time since mid-2020.
Under the deal, Avation would also be entitled to receive payments relating to utilisation since September 1 last year on a “power by the hour” basis and a promissory note for a portion of rent outstanding for the period prior to that.
The company said it believed the mooted agreement represented a “positive outcome” given the current market environment for twin-aisle aircraft.
Avation's chairman, Jeff Chatfield, added: “A successful restructuring returns this aircraft to revenue generation and ensures rent collection which is a positive outcome for Avation."