West Atlantic Sweden (SWN, Gothenburg Landvetter) has initiated talks with LUSAT, a holding company owning Swiftair (WT, Madrid Barajas), and its bondholders regarding the potential refinancing of the Swedish cargo specialist and an equity transfer.

"LUSAT has made an offer to the shareholders of the company and the bondholders as regards the repayment of the bonds. The offer includes several different features such as an equity injection in the company and pre-agreed assets to be allocated to the bondholders," West Atlantic said in a statement.

The potential offer is still subject to ongoing negotiations and will then have to be approved by the company's share- and bondholders.

If the transaction materialises, bondholders will receive partial amortisation in cash. Their remaining claims will be transferred to an SPV which will accede certain pledged assets and which will issue new bonds to the bondholders in exchange for the existing bonds.

According to interim results, West Atlantic lost SEK35.2 million kroner (USD3.3 million) and had an EBITDA margin of 8.6% in 2018.

West Atlantic operates four B767-200(F)s, twenty-nine BAe ATP(F)s, and two CRJ(F)s. Its subsidiary West Atlantic (United Kingdom) (NPT, Coventry) operates six B737-300(F)s, fourteen B737-400(F)s, and four B737-800(F)s.

For its part, Spain's Swiftair, a passenger and cargo charter specialist, operates a fleet of six ATR 42-300(F)s, one ATR72-200, ten -200(F)s, eight -500s, one -500(F), one B737-300(F), seven -400(F)s, and ten E120(F)s.