Papers show GPA trading at a profit

GPA, the aircraft leasing company that has just agreed a rescue deal with General Electric Capital Corporation, had dollars 553m in the bank at the end of March, according to documents sent to bondholders on Monday which confirm that the business was still making money at an operating level, writes Peter Rodgers.

Before tax and write-offs GPA made a profit of dollars 44m in the year to March, against dollars 238m a year earlier, but this does not include the cost of restructuring the organisation, which will drive it into a heavy bottom-line loss for the year.

The other costs are likely to include big penalty payments to aircraft manufacturers for deferring and cancelling orders, which were not included in the bondholders' documents.

These were prepared to update GPA's financial position just ahead of a dollars 50m capital repayment to bondholders made on Monday, which triggers a restructuring of the company's bank debt. Bondholders were told that GPA earned dollars 294m after depreciation, a sharp fall from dollars 422m in 1992. Interest costs rose from dollars 184m to dollars 250m.

The documents showed that GPA had dollars 3.195bn of secured and dollars 506m of non-guaranteed debt to banks and other organisations including export credit agencies at the end of March. Unsecured debt was dollars 2.09bn.