DHL deal slashes ATSG debt

DHL has signed an agreement with Air Transport Services Group (ATSG) to lease up to four 767-200SFs from ATSG’s subsidiary, ABX Air. The agreement will run from August 2010 to 2015.

In return, DHL has taken over the financial responsibility, retroactively from 31 January, for the capital leases on five 767-200PC aircraft. This will remove US$50.2 million in debt and $21.5 million of net book value from ATSG.

The agreement, which results from a memorandum of understanding made in March 2009, calls for ABX Air to grant DHL up to $10 million of credit against future rent obligations for the four 767-200SFs. If DHL elects not to exercise its options for any of the four 767-200SFs, ABX Air would pay DHL $2.5 million for each one.

ABX Air is expected to continue to operate some or all of the five leased 767-200PCs as required under the current ACMI Agreement between the companies. The agreement does not stipulate whether ABX Air would continue to operate any of the four 767-200SF aircraft that DHL may opt to lease.

ATSG chief executive officer and president, Joe Hete, said, “The completion of this agreement with DHL formalises the deleveraging process that we announced earlier this year, including the restructuring of our promissory note to DHL.

“The combined effect of the capital lease transaction and note restructuring, including our commitment to pay DHL $15 million to further reduce the principal balance of the note, would be to reduce our outstanding debt principal by approximately $113 million.

“The note restructuring also removes some of the limitations on our board’s ability to consider dividend payments or buybacks for our shareholders. DHL has worked closely with us in finalising these agreements, and we continue to jointly explore opportunities to provide DHL with additional 767-200SF aircraft on an ACMI or dry lease basis beyond 2010.”

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