Sweden-based freight airline West Atlantic is in talks with Spanish company LUSAT over possible refinancing.

LUSAT is a holding company with interests that include Spanish cargo carrier Swiftair and Aviation Leasing Spain.

West Atlantic describes LUSAT as a potential new shareholder.  It adds that the talks include major existing bondholders in the company and revolve around West Atlantic’s “outstanding bond loan,” together with discussions of ‘principal terms for a refinancing of the Group.”

West Atlantic has been loss-making in recent years. For 2018, the carrier posted a net loss of SEK35.2 million ($3.8 million), narrowed from the 2017 net loss of SEK61.6 million.

The loss came from revenues of SEK1.81 billion, up 14.1% on 2017’s figure of SEK1.59 billion.

In a regulatory release, the Gothenburg-based company said LUSAT had made an offer to West Atlantic’s shareholders and bondholders for repayment of the bonds. The offer included an equity injection in the company and pre-agreed assets to be allocated to the bondholders.

“The offer is subject to more detailed discussions and certain conditions, including approval by the bondholders at a written procedure and approval by the company’s board of directors. Additional information will be provided once available.”

West Atlantic operates more than 50 aircraft and describes itself as the largest freight airline in Europe. Its fleet is largely split between Sweden and the UK. It is the world’s largest operator of the BAe ATP freighter, with the rest of the fleet being split between several marks of Boeing 737, four 767s and two Bombardier CRJ200s.

The bulk of Swiftair’s fleet is composed of ATR 42 and 72 turboprops, with the remainder consisting of Boeing 737-300 and 400s, plus Embraer 120 Brasilias.

Alan Dron alandron@adepteditorial.com