Air Transport World

Pride goeth.... (GPA Group Ltd. stock offering fails)

The resounding failure of GPA Group's public flotation puts new pressure on the megalessor to either cancel/delay aircraft deliveries or find new sources of funding at a time when few lenders are eager to increase their exposure to the airline industry.

GPA had hoped to use the estimated $700-800 million in new equity to offset new borrowings required to pay for $11.9 billion worth of aircraft set to arrive between now and 2000, with $7 billion worth arriving through '94.

Without the equity, GPA's balance sheet may not be able to sustain additional borrowing. As of March 31, the company had total liabilities of $5.3 billion against total equity of $1.2 billion.

Ironically, the very real need for equity may have worked against GPA. …

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