The right to appeal has been won by a Vietnamese airline facing a bill of up $250 million for compensation in a High Court case over aircraft leases between a London investment firm and a Vietnamese airline. Vietjet is a private airline that aims to fly from Vietnam to London. FitzWalter Capital Limited, a private investment company, has investments in the aircraft-leasing sector.
The story revolves around complex lease agreements called Jolcos. In this case, it involves four Airbus A321 planes leased by Vietjet that ran into trouble after being grounded during the pandemic. Jolco structures consist of a mix of equity and debt provided by Japanese investors. The leasing airline pays rent to investors and lessors throughout the lease period, before purchasing the aircraft at the end with a call-option. The jet is not returned to the lessor at the end.
Legal documents state that FWC approached BNP and Natixis as the main lending banks in the Vietjet case without letting the airline know. The FWC assumed the debt, despite the fact that Vietjet had been negotiating with banks in good faith over terms of lease payments.
FWC, once it had the debt under control and the security rights over the planes, instructed the banks to issue termination notices for breaching the lease terms. This resulted in Jolco’s disruption. FWC was able to collect the balance of the lease payments and the aircraft.
Vietjet disputes the termination notices sent by banks on behalf FWC. The case revolves around whether or not the lease of the aircraft was terminated validly and what the term “financial institutions” means in the loan agreement. FWC has filed a claim in 2022 against Vietjet at the UK High Court, seeking damages on top of the aircraft and lease revenue it claims it is owed. Damages are estimated to be $250 million.
FWC was successful in obtaining a hearing at the High Court to hear Vietjet’s case. Last week, the airline was granted the right to appeal. This is expected to happen early next year. The airline stated: “Vietjet was pleased that the High Court granted leave to appeal after agreeing with our view that the appeal had a real chance of success. We are looking forward to presenting our arguments in front of the Court of Appeal, and we feel even more confident that we will win.
Vietjet has been able to renegotiate leases for dozens of companies without having to force any investors or creditors into taking a cut. With its new widebody aircraft, the airline is planning to expand into Europe.
FWC was contacted to provide a comment. Ben Brazil, a former Macquarie senior executive and Australian, founded the fund in 2020. In 2021, it closed a $920 million first fund with contributions from family offices, foundations, pension funds, asset managers, sovereign wealth funds, private pensions and public pensions.
The Japanese investment entity, which owned the Airbus A350s, triggered a Chapter 11 proceeding in the US, and the first attempt to purchase the aircraft failed. JPL, which operated the Jolco for Vietnam Airlines, called FWC’s tactics “hyper-aggressive” and “wholly inappropriate”.
Post Disclaimer
The following content has been published by Stockmark.IT. All information utilised in the creation of this communication has been gathered from publicly available sources that we consider reliable. Nevertheless, we cannot guarantee the accuracy or completeness of this communication.
This communication is intended solely for informational purposes and should not be construed as an offer, recommendation, solicitation, inducement, or invitation by or on behalf of the Company or any affiliates to engage in any investment activities. The opinions and views expressed by the authors are their own and do not necessarily reflect those of the Company, its affiliates, or any other third party.
The services and products mentioned in this communication may not be suitable for all recipients, by continuing to read this website and its content you agree to the terms of this disclaimer.