Ryan warns of GPA fall

TONY RYAN, chairman of GPA, the Irish aircraft leasing group, warned yesterday that the abandonment of its dollars 1bn ( pounds 600m) international share offer in June and the consequent need to reschedule dollars 5bn worth of aircraft orders would hit profits this year, writes Michael Harrison.

Addressing GPA's annual shareholders' meeting in Shannon, he said there would be a 'significant reduction' in second-quarter profits. Although the level of provisions and charges would not affect the value of GPA's assets they might have an effect on its annual earnings, he said.

Dr Ryan indicated that GPA was close to raising a further dollars 752m through the sale of aircraft leases to institutional investors, saying that 'substantial progress' had been made in the structuring of the securitisation programme, known as Alps-2. GPA had also received indications from key debt-rating agencies that they would give an AA rating to the senior debt in the fund. The forthcoming securitisation programme may be followed by a third early next year to raise another dollars 750m.

GPA needs to complete Alps-2 if it is to go ahead with the third element of a refinancing programme brought about by the collapse of the share offer. This involves raising another dollars 300m from existing investors.

The second phase of the refinancing - the rescheduling of aircraft orders worth dollars 5bn - has already been agreed in principal with aircraft manufacturers. Dr Ryan said the rescheduling would reduce GPA's purchase commitments by dollars 1.5bn in 1993 and 1994.

Agreement had also been reached with the group's suppliers to make dollars 650m in additional liquidity available over the next 18 months, he said.