Avation PLC (LON:AVAP) is anticipating that it can “successfully operate for an extended period greater than a year” as it unveiled a number of measures to support its finances during the coronavirus pandemic.
The aircraft leasing company said its liquidity position is “satisfactory” with total cash of US$129mln, US$53.9mln of unencumbered assets and US$11.1mln in trade receivables.
Avation also said there were no aircraft lease expiries before August 2021 and that is has lowered its administration and general expenses.
Meanwhile, the company said some ATR aircraft in its portfolio were “currently operating normally” and that the aircraft were typically used on regional routes which it predicted will be the first segment of the industry to recover from global travel restrictions during the pandemic, as “government, essential and health services are significant users of domestic air travel”.
Avation added that it believed the “economic and travel impact of the pandemic can be mitigated within the next 12 months” and that it will be in a position to continue providing leases to its clients.
However, the firm said due to the current situation no dividends will be considered before September 2020 and that it is “probable” that it will not pay a further dividend in 2020 unless a “remarkable global recovery occurs”.
The company is also offering a package of support for its airline clients, most of which had entered into short-term financial relief agreements with the firm.
“It is anticipated that Avation can successfully operate for an extended period greater than a year on this basis as ongoing cash income will be sufficient to cover expected financial obligations”, the company said.
Strategic review update
In a separate announcement, Avation said it is continuing its review of strategic options to maximise value for shareholders, including a potential sale, previously announced in January.
The company confirmed that it is “engaged with multiple interested parties as part of the formal sale process” and while several parties remained interested, progress had been delayed “in light of the market dislocation resulting from the [coronavirus] pandemic”.
Shares in the company soared 42.3% to 153p in late-mornign trading on Tuesday.
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