Western Global Airlines (KD, Fort Myers Southwest Florida) has exited the Chapter 11 process with creditor support and less than USD100 million in debt, according to a media release issued by the cargo carrier on December 5, 2023.

The restructuring plan, approved Judge Karen Owens of the Delaware District US Bankruptcy Court, sees the airline's debt slashed by approximately USD460 million and fresh capital put into the business. This includes USD11 million from DKB Partners, a fund controlled by James (Jim) Neff, who is also the founder and CEO of Western Global Airlines.

The airline filed for Chapter 11 in August, ending several months of speculation about its future. In subsequent filings, Western Global declared liabilities of around USD560 million spread across loans, a credit facility and notes. Western Global has been profitable throughout its ten-year history. However, its financial fortunes recently reversed as the pandemic air freight boom tapered off. In June, Neff acquired USD115 million of outstanding senior debt for USD45 million.

"My top priority has always been to preserve the long-term viability of the company," said Neff. "I am pleased our restructuring process has achieved that." Neff provided USD77.5 million of the debtor in possession (DIP) financing to help keep the airline flying during the Chapter 11 process. He also provided equity and exit financing and waived around USD100 million of secured and unsecured prepetition debt he held to provide recovery to creditors.

DIP lenders will now accept convertible notes worth USD94.8 million, which can be converted into 58% of Western Global newly issued common stock.

Western Global's counsel, Candace Arthur of Weil, Gotshal & Manges LLP, told Owens that the airline is now "better than it was" and "without operational distractions."

The carrier has retained its pre-Chapter 11 fleet, including one B747-400FSCD, one B747-400(BDSF), two B747-400(BCF)s, and sixteen MD-11Fs. In addition, Western Global retains two MD-11Fs awaiting conversion, eleven part-out aircraft, and a substantial inventory of parts, materials, and tooling. All but one of the aircraft are company-owned. However, ch-aviation fleets data notes that the B747-400(BDSF) and ten MD-11Fs are inactive.