Waypoint Leasing Holdings – Court Approves Asset Purchase Agreement, Macquarie to Acquire 120 Aircraft for $445mn

February 15, 2019 – The Court hearing the Waypoint Leasing Holdings case issued an order [Docket No. 444] approving (i) an amended asset purchase agreement, dated December 7, 2018 between Macquarie Rotorcraft Leasing Holdings Limited (“Macquarie”) and certain of the Debtors (the “Macquarie APA”) and (ii) the sale of certain of the Debtors’ assets (the “Acquired Assets”)to Macquarie pursuant to the terms of the Macquarie APA [Docket No. 64]. Initially, the Macquarie APA stipulated a purchase price of $650mn; this, however has been substantially adjusted to reflect the sale of three groupings of helicopters (eg those related to the WAC2, WAC9 and WAC12 financings) to credit bidding facility agents. The adjustments are complicated (see below), but the upshot is summed up in a supplemental declaration submitted by Matthew Niemann [Docket No. 404] in support of the sale which states, “[Initially] Macquarie contractually agreed to purchase the Debtors’ core and non-core aircraft (approximately 160 aircraft) and to assume certain executory contracts, unexpired leases, and related liabilities in connection therewith. As a result of the WAC 2, WAC 9, and WAC 12 Successful Credit Bids, one of which Macquarie by agreement and Court order could not match and two of which Macquarie chose not to match, Macquarie will not be acquiring the WAC Collateral of WAC 2, WAC, 9, or WAC 12. Instead, Macquarie will be acquiring the Acquired Assets (as defined in the Proposed Sale Order) for total consideration of approximately $445 million. The Acquired Assets comprise substantially all of the assets of the Debtors, including without limitation, 120 Aircraft, all outstanding leases with respect to such Aircraft, related parts, tooling and other inventory, certain leases for real estate, intellectual property, and certain other contracts.”

The Macquarie APA details the ageed purchase price as follows: “Purchase Price. The aggregate consideration to be paid by Buyer for the sale of all of the Transferred Equity Interests, the Transferred Assets and the obligations of the Seller Parties set forth in this Agreement (the ‘Purchase Price’) shall be an amount in cash equalto the sum of (a) subject to adjustment under Section 6.11 (if any), $650,000,000 (the ‘Base Purchase Price’), plus (b) the Final Transferred Entity Cash (if any), minus (c) the Final Transferred Entity Debt (if any), plus (d) the Final Net Deposit Amount, plus (e) the Aircraft Adjustment Amount, minus (f) the Closing Delay Payment (if applicable), minus (g) the Amendment Adjustment Amount (if applicable), and minus (h) the [redaction]  Adjustment Amount (if applicable).”

The Niemann declaration provides further detail as to how value was distributed amongst the various aircraft groups; and how the original $650mn waa adjusted downwards to $445mn based on the exclsuion of aircraft sold in the WAC2, WAC9 and WAC 12 sales. The declaration states, “On January 8, 2019, the Debtors received a letter from counsel to Macquarie (the ‘Allocation Letter’) that detailed Macquarie’s allocation of its $650 million purchase price (the ‘Base Purchase Price’) on a WAC-by-WAC basis. Pursuant to the Bidding Procedures Order, on January 8, 2019, Debtors’ counsel informed each WAC Facility Agent of the percentage allocation of the Base Purchase Price that Macquarie proposed to allocate to the assets of their respective WAC Facilities. Pursuant to the Allocation Letter, the portion of the Base Purchase Price that Macquarie allocated (collectively, the “WAC Allocations”) to the collateral of each affected Participating WAC Lender prior to any applicable adjustments contemplated pursuant to the Purchase Agreement or otherwise is as follows: 

Subsequently, on the Credit Bid Deadline, the WAC Facility Agents for WAC 2, WAC 9, and WAC 12 submitted Credit Bids. Specifically, (i) Wells Fargo Bank, N.A, as WAC Facility Agent for the WAC 2 Lenders, submitted a 363(k) Credit Bid, (ii) Lombard North Central PLC, as WAC Facility Agent and WAC 9 Lender, submitted a Streamlined Credit Bid, and (iii) Sumitomo Mitsui Banking Corporation, Brussels Branch, and Sumitomo Mitsui Banking Corporation Europe Limited, as WAC 12 Administrative Agent and WAC 12 Collateral Agent for the WAC 12 Lenders, submitted a Streamlined Credit Bid.”