(RTTNews) - AeroCentury Corp. (ACY) said it commenced a voluntary case under chapter 11 of title 11 of the United States Code in the United States Bankruptcy Court for the District of Delaware.
The company stated that it has determined that the Chapter 11 process is the most effective next step to resolve the Company's outstanding indebtedness and to progress toward the Company's goal of continuing in the regional aircraft business in order to preserve enterprise value for the company's stakeholders.
ACY closed Monday trading at $6.91 down $0.59 or 7.87%. In the after-hours, the stock dropped further $2.61 or 37.77%.
The company noted that it has proposed in one of its Chapter 11 motions an auction sale for its assets in order to fund repayment of its indebtedness to its sole secured lender, Drake Asset Management Jersey.
The company said it entered into a stalking horse agreement with Drake to acquire the aircraft collateral securing the Drake indebtedness. In the event Drake is the successful bidder, the closing of the purchase will resolve all of the company's outstanding indebtedness to Drake.
As of March 29, 2021, the company owned twelve aircraft. Ten of those aircraft are encumbered by a first priority lien securing the company's about $83.2 million of secured indebtedness of the Company held by Drake, while two are on lease to lessees in Kenya and not subject to the first priority lien of Drake.
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