On 23 March 2020, DP Aircraft I (DPA) announced that lease payments due on the 13th of March 2020, from Torskefjorden Leasing Limited (part of the Norwegian group and guaranteed by Norwegian) had not yet been made in respect of either of the two aircraft (LN-LNA and LN-LNB) DPA leases to Norwegian. Further to this announcement, DPA has now announced that DPA is suspending its dividend payments with immediate effect and until further notice.
DPA says that, while discussions are continuing with both Norwegian Air and Norddeutsche Landesbank Girozentrale (on behalf of the lending banks providing debt financing in respect of the two aircraft), the ongoing and open-ended nature of the Covid-19 crisis means that they are unlikely to be concluded in short order. The board is of the view that it is prudent at this time to suspend the payment of dividends and this will give DPA the best possible negotiating position in its discussions with its lenders. The Board says that its priority lies in preserving the long-term financial stability of DPA; and maintaining an appropriate level of liquidity is key to this.
[QD Comment: Given that aircraft are currently laid up on runways, and there is no sign of them going anywhere soon. This is not a major surprise. Hopefully, given the backdrop, the lending banks will be accomodative, and the dividend suspension will be a temporary one. It’s difficult to see that any of the aircraft leasing funds will be able to continue to pay their dividends if the planes are grounded for an extended period.]