(Bloomberg) -- Nordic Aviation Capital AS is planning to file for Chapter 11 bankruptcy this month to carry out its restructuring plan, according to people with knowledge of the matter.

The aircraft lessor has shored up support from its largest creditors to implement the plan, said one of the people, who asked not to be identified because the discussions are private. Major creditors have also agreed to provide financing to help fund Nordic Aviation’s operations through bankruptcy, the people said.

A representative for Nordic Aviation declined to comment.

Under a previous agreement with its biggest creditor groups, Nordic Aviation said it would convert “a substantial amount” of the group’s debt into equity and raise a $300 million equity rights offering and a $200 million revolver. Debt holders led by Silver Point Capital and Sculptor Capital Management are set to take control of the aircraft lessor, Bloomberg reported.

The company remains on track to raise $500 million of new money, one of the people said. Chapter 11 allows a firm to continue operating while it works out a plan to repay its debts. 

Founded in Denmark in 1990, Nordic Aviation leases almost 500 aircraft to about 70 airline customers around the world. As of June 2020, it had around $5.7 billion of debt. Like many of its peers, the company has struggled to contend with the slowdown in air travel amid the pandemic. 

Nordic Aviation lost $2.36 billion in the fiscal year that ended June 30 after it wrote down the value of aircraft and other assets. Its lease revenue slumped 15% year-over-year to $642 million. 

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