Dr. Peters Group is to part out two of its A380 aircraft returned by Singapore Airlines at the end of the ten year lease. The aircraft were financed by DS funds No. 129 and No. 130. Dr Peters maintains that this decision will lead to a “positive result for equity investors”.

“After extensive as well as intensive negotiations with various airlines such as British Airways, Hi Fly and Iran Air, Dr. Peters Group has decided to sell the aircraft components and will recommend this approach to its investors. From Dr. Peters Group’s point of view, the alternative options negotiated for new aircraft lease agreements did not meet investors’ requirements to achieve a suitable result. Even a sale of the aircrafts, which had also been considered, did not meet the conditions demanded by Dr. Peters Group,” the group said in a statement.

Dr. Peters Group is working with VAS Aero Services on the sale of the components. Over the next two years, Dr Peter’s says that proceeds from the part out of the aircraft components will generate approximately $45 million. “The main reason for this high assessment is that many airlines currently using the A380-800 will have a high demand for individual replacement components due to upcoming maintenance intervals,” it said.

The Rolls-Royce Trent engines from the two A380s will continue to be leased out beyond March 2019, which Dr. Peters Group expects to generate at least the current monthly income of $480,000 for each investment company. It is anticipated that the engines will be sold by the end of 2020.

The overall return for investors in the two funds is estimated at 145 to 155%, which includes the currency gains already realised. This includes the repayments already made of approximately 72% (DS Fund No. 129) and 81% (DS Fund No. 130) and a full repayment of the remaining loans.

Dr Peters says that it expects the main components, such as the landing gear or the auxiliary engine, will be sold very quickly, and that it will be able to make an initial payment to investors in the first quarter of 2019.

“We are confident that this concept will satisfy and possibly even exceed the current expectations of our investors. Ultimately, this is our main goal,” says Anselm Gehling, CEO of Dr. Peters Group. “The market for the A380-800 aircraft type has not developed positively in recent years. Some airlines have cancelled orders from Airbus, while others have opted for smaller long haul jets. Finally, the ongoing negative discussion about the A380-800 has not led airlines to increasingly rely on this type of aircraft. In light of this development, the concept that has now been finalised is an excellent achievement with a total revenue forecast of around $80 million per aircraft.”

The investors of DS Fund No. 129 and DS Fund No. 130 are to vote on the concept presented at a shareholders’ meeting on the 28th June 2018. If the outcome is positive, Dr Peters states that the strategy will be implemented with immediate effect.