Thu, Jul 15, 2010
Reaches Agreements For Extension Of Aircraft Leases, Can
Eventually Purchase Leased Aircraft
Gulfstream International Group has
reached a final agreement with the FAA providing for the settlement
of certain proposed civil penalties, the company announced Tuesday
in a news release. The agreement calls for the company to pay
$550,000 over a five-year period.
It has also reached an agreement with Raytheon Aircraft Credit
Corporation ("RACC") to extend its current Lease Amendment and
Forbearance Agreement relating to 21 Beech 1900D airliners leased
from RACC until December 6, 2010 (the "Lease Termination Date") on
their existing terms and provide for, among other things, the
opportunity to purchase the fleet of aircraft from RACC, enabling
the company to reduce existing annual lease payments by
approximately $5 million.
The Lease amendment and Forbearance
Agreement, reached with RACC on May 14, 2010, also includes certain
concessions with respect to past payment obligations due in
December, 2010, as well as other indebtedness, which is contingent
upon closing the aircraft fleet purchase by the Lease Termination
Date, and would reduce the Company's overall obligations to
RACC.
The net effect of the FAA and RACC agreements, subject to
completing the aircraft fleet purchase, would result in a reduction
of current liabilities in excess of $1.0 million.
David Hackett, CEO of Gulfstream, commented, "The ability to
purchase our fleet of aircraft leased from RACC represents a major
milestone in our goals of significantly lowering our operating
costs and strengthening our balance sheet, strongly positioning us
for a return to profitability. We also believe that settling the
FAA's proposed civil penalty is in the best interest of our company
and its stakeholders, and while we have differing views as to the
merits of some of the claims, the Company will be able to ensure
its focus remains on continuous improvement in operations and
financial results."
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