AeroCentury Corp. (ACY) stock combined with its branched-off businesses and daughter companies, specializes in leasing and finance services to various airlines around the globe. ACY has reported that Aero century Corp daughter companies filed a petition (the “Chapter 11 Case”) under chapter 11 of title 11 of the United States Code. A chapter 11 debtor usually seeks relief and aims reorganization to keep sustain its business and resolve indebtedness.

ACY has planned that the Chapter 11 process is an extremely efficient way to pay back the creditors and increase company progression towards their aim of continuing in operating aircraft and leasing in order to save enterprise value for the stakeholders in the company.

Aerocentury corp. administration regarding its assets and functioning of its aircraft and communications will not see any changes, however, ACY will pay manufacturers and distributors under a customized set term for goods and services received, with the payment structure and method remaining the same for the employees.

ACY Opts for Auction Sale.

ACY has brought forward an auction sale (“Auction Sale”) for its assets to fund repayment of its creditors to its sole secured lender, Drake Asset Management Jersey Limited (“Drake”). ACY has initiated a bid with Drake to buy the aircraft collateral securing the Drake indebtedness, however more valuable bids may produce circumstantial change

Aerocentury corp. owns twelve aircraft out of which Ten is hindered for full usage by a first priority lien securing the Company’s capital of $83.2 million However two are on lease in Kenya with no correlation to Drake’s indebtedness.

Conclusion

AeroCentury Corp. (NYSE: ACY) has invested in a very lucrative market of lease financing for airlines, however, a decrease in demand for traveling due to the pandemic as well as overcoming a high debt may prove to be extremely significant in increasing the company’s valuation.