GPA forced to seek more time

GPA, the financially stretched aircraft leasing group, will be forced to seek a further waiver of its banking agreement on Friday as talks continue over the company's delayed dollars 3.6bn refinancing, writes Michael Harrison.

The extension of the waiver is needed because the Shannon-based group has still not obtained the backing it needs from shareholders and new investors for a dollars 200m rights issue - the final element in a complex financial restructuring.

GPA had hoped to complete the restructuring, forced on it by the flop of last year's dollars 1bn share offer, by the end of March. But it had to obtain a one- month waiver from its bankers in mid- March when it became clear that the deadline would be missed. The new waiver will be for another month.

The company, led by Dr Tony Ryan, has reached agreement with its suppliers to cancel or reschedule dollars 8bn-dollars 9bn worth of aircraft due for delivery up to the end of the decade. It has also received sufficient support from its banks to reschedule repayments on dollars 3.6bn of bank debt.

But signatures on each of these agreements depend on GPA successfully raising dollars 200m in new equity. Sources close to the company said discussions were continuing with existing and potential investors.

Although no formal commitments to participate in the equity issue had been signed, GPA and its advisers had a good idea what the level of support would be. Mitsubishi Trust, GPA's biggest shareholder with an 11.3 per cent stake, has been closely involved in the restructuring and is thought to have persuaded other Japanese shareholders to participate.