TVH Bonds Refinanced by LHV Bank

Seven Bombardier CRJ900 type aircraft owned by Transpordi Varahaldus OÜ (TVH) are now fully financed by LHV Pank, while Estonia’s national airline Nordica continues as their lessee. Government-owned TVH refinanced its previously issued bonds with a 23 million euro loan from an Estonian LHV Pank.

In 2017 and 2018, TVH issued bonds for a total of 35 million euros which were purchased in equal parts by LHV Pension Funds and LHV Pank. TVH used the financing to purchase additional CRJ900-type aircraft and lease them to Nordic Aviation Group AS (Nordica). The outstanding amount of the bonds was now refinanced with a bank loan obtained from LHV Pank.

Indrek Nuume, Head of Business Banking at LHV Pank, said that the local bank and the local aircraft owner were a perfect match. “Our cooperation with TVH has been long-standing, successful and reliable. We’re glad to be involved in their investment plans. As LHV Pension Funds are always on a lookout for new investment opportunities with a higher rate of return, we agreed on new suitable bank financing terms with TVH. We can see that the sector is recovering well and wish all the success to Estonian aviation,” Nuume added.

Ergo Blumfeldt, Member of TVH’s Management Board, noted that the two past years had been exceedingly complicated for aviation. He explained however, that due to reliable and long-standing cooperation with the lessee and the financiers alike, the asset holding company has weathered the crisis well, managing to keep its current commercial activities profitable. Blumfeldt pointed out a positive development that in recent months the regional aviation market has been clearly showing significant restoration of demand.

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TVH 2020 financial year operating profit 1.83 million

According to the audited financial results for 2020 the operating profit of OÜ Transpordi Varahaldus (TVH) was 1.84 million euros at a 9.38 million euro annual turnover.

According to the member of the management board Ergo Blumfeldt, the last financial year was the most complicated in commercial aviation of the last 75-years in history due to the COVID-19 pandemic. Globally, the passenger numbers fell by more than 80% and the ongoing health crisis had major negative impact on the economic results of aviation companies and the market value of aircraft. Utilization of TVH aircraft declined by 79.2% compared to 2019. Pursuant to the International Financial Reporting Standards (IFRS), TVH also carried out the impairment review of its fixed assets, as a result of which the accounting loss of the last financial year was ca 11.9 million euros.

Member of the management board Tõnis Tamme added that thanks to good cooperation with the lessee of the aircraft and the bondholders financing the company (LHV Bank and the pension funds managed by LHV), the company has taken the measures and made the changes necessary to handle the crisis and has managed to keep its business operations profitable. As a positive development Tamme mentioned that over the past few months the first signs of recovery in passenger demand are visible on the regional aviation market.

The annual accounts of TVH were audited by AS Deloitte Audit Eesti. Minister of economic affairs and infrastructure who exercises the rights of the sole shareholder of TVH approved the annual report at the shareholders’ meeting on 30.04.2021. TVH is a state-owned company with the aim to carry out and manage investments into fixed assets in the transport sector, e.g. aircraft leasing. The company owns 7 Bombardier CRJ900NG passenger jet aircraft in 88-seats configuration.

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New members of the supervisory board: Ave Henberg and Raoul Lättemäe

On May 4th, 2021 the minister for economy and infrastructure, acting as the representative of the sole shareholder of Transpordi Varahaldus OÜ, recalled Katrin Andre ja Kaupo Raag from the supervisory board of the company and appointed two new members. Ave Henberg is a legal counselor at the Legal Department of the Ministry of Economy and Communications, Raoul Lättemäe works as the Head of the Fiscal Policy Department of the Ministry of Finance.

The chairman of the supervisory board Maigi Pärnik-Pernik thanked Kaupo Raag and Katrin Andre for their significant contribution into the development of TVH. She also welcomed the new supervisory board members who have accepted the challenge to contribute to the Estonian aviation in these complicated times.

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TVH 2019 financial year net profit 3.2 million

According to the audited financial results for 2019, the annual turnover of OÜ Transpordi Varahaldus (TVH) was 9.1 million euros and net profit was 3.2 million. Minister of economic affairs and infrastructure who exercises the rights of the sole shareholder of TVH approved the annual report which was audited by AS Deloitte Audit Eesti.

According to the member of the management board Ergo Blumfeldt, the last financial year went successfully according to the plans of the company. In addition to leasing aircrafts, the company also started leasing airplane spare parts, tools and components. Blumfeldt added that considering the rapid spreading of COVID-19 and the likely negative impacts that will target commercial aviation globally, the current financial year will be very complicated also for aircraft lessors.

TVH is a state-owned company with the aim to carry out and manage investments into fixed assets in the transport sector, e.g. aircraft leasing. The company owns 7 Bombardier CRJ900NG passenger jet aircraft in 88-seats configuration.

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Transpordi Varahaldus OÜ joined Estonian Aviation Cluster

Estonian Aviation Cluster www.eac.ee is a non-profit association established in early 2019. It unites aviation-related Estonian undertakings and organisations and through cooperation, seeks involvement in creation of the national aviation strategy and also aims at increasing the attractiveness of Estonia as an aviation country in the eyes of investors.

According to Kristo Reinsalu, General Manager of the Aviation Cluster, “Aviation is a growing industry: it stands for much more than just direct links and carriage of passengers. The Cluster brings together all companies in the aviation value chain from airport and air carriers to various companies providing miscellaneous services in the area of maintenance, IT, logistics, transport and tourism”.

Reinsalu says that the organisation has three main tasks that consist in increasing the competitive ability of Estonian aviation, enhancing its marketing and promoting innovation in aviation sector. “It is a welcome and logical move that Transpordi Varahaldus OÜ (TVH) – the largest aircraft asset management company in Estonia – decided to join our cluster,” said Reinsalu, who finds that with its seven Bombardier CRJ900 passenger aircraft, TVH will represent the view and needs of asset management companies that were missing from the aviation cluster before.

Ergo Blumfeldt, the member of the management board of TVH noted that joining the cluster was driven by the wish to promote national aviation sector that, unlike common belief, comprises much more than just the companies directly involved in air transport. Symbiotic relationship of various sector participants is beneficial for everyone, as demonstrated by positive examples from both Estonian Association of Information Technology and Telecommunications and Estonian Defence Industry Association.

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TVH profits 3.6 million in 2018

According to the audited annual accounts of Transpordi Varahaldus OÜ for 2018 the company’s profit for the last financial year were 3.6 million euros at a turnover of 7.9 million euros. Compared to the previous financial year 2017 the company’s turnover increased 14% while its profit went up by 24%. The annual accounts of the company were audited by AS Deloitte Audit Eesti. The Minister of Economy and Infrastructure, acting in the name of the sole shareholder of TVH, approved the annual accounts at the meeting of shareholders on 15.05.2019.

TVH Management Board Member Ergo Blumfeldt said that the most important event in 2018 was the expansion of the company’s fleet from six aircraft to seven. In December 2018 TVH acquired a Bombardier CRJ900 aircraft and leased it to the Estonian national airline Nordica. The transaction was financed with 10 million euros through a bonds issue which were acquired by LHV Bank and LHV funds in equal parts.

TVH is a fully state-owned company, the objective of which is to function as an investment entity that finances and manages investments in fixed assets in the transport sector, incl. investments for leasing purposes. The company owns seven 88-seater Bombardier CRJ900 NG jet aircraft.

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TVH acquired its seventh aircraft

Photo by Thomas Tõnisson

As a result of a successful bond issue of 10 million euros OÜ Transpordi Varahaldus acquired an additional CRJ900 NextGen type aircraft, which was long-term leased to the Estonian national airline Nordica.

In December 2018 Transpordi Varahaldus OÜ (TVH) issued securities amounting to 10 million euros with an 8-year maturity. Securities were purchased by Estonian financial institutions AS LHV Varahaldus and AS LHV Pank. TVH used the additional finances for the acquisition of one vintage CRJ900NG, thereby increasing the fleet of the company to seven aircraft of the same type.

According to the member of the management board of TVH – Ergo Blumfeldt, this transaction marks the planned gradual expansion of the business activities of the company, preceded by thorough financial analysis and due performance of the current business plan. According to the estimation of the management board TVH will earn a profit of ca 3 million euros in 2018.

LHV Pension Funds Manager – Romet Enok noted that TVH bonds provide higher yield than usually found on the markets today. “We continue to search for and analyse local projects that are suitable for investing pension funds money into the Estonian economy and an additional aircraft with already pre-determined employment is an asset with real value and a properly secured investment,” Romet Enok explained.

„LHV Bank is glad to be involved in the investment plans of Transpordi Varahaldus. Estonian capital and an Estonian airline are still a good match and our cooperation allows the financing of also more expensive and unusual assets and finding the most suitable solution for our client,” commented LHV Corporate Banking Manager – Indrek Nuume.

In the course of the ongoing reorganisation of its activities, the Estonian national carrier Nordica intends to develop its business in export of services and the new aircraft has already been deployed for providing services to the leading Scandinavian airline SAS. According to the Chairman of the Board of Nordica – Hannes Saarpuu, the current market situation provides interesting export opportunities. “In case the supply currently exceeds demand in Tallinn airport, then it is reasonable for us to be present where we can expand our business in a more profitable manner. Issue of securities by TVH represents a good example of investors’ faith in the sustainability of our plans,” added Saarpuu.

Acquired aircraft is well-maintained and manufactured in the Bombardier factory in Canada, equivalent to the existing fleet of Nordica. The Estonian flag carrier continues its strategy of using same type of aircraft to maximise cost-efficient exploitation of its fleet.

TVH is a state-owned company operating as an investment entity, with the aim of financing and managing investments in fixed assets in the transport sector. Previously, TVH has carried out a successful bond issue of 25 million euros in 2017, which then allowed the acquisition of two CRJ900NG aircraft.

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Results of 2017 approved by the sole shareholder

At the annual general meeting of shareholders of OÜ Transpordi Varahaldus (TVH) held on 30 May 2017, Mrs Kadri Simson, Estonian Minister of Economic Affairs and Infrastructure, approved the state-owned company’s second annual report, which indicates the company’s turnover for the 2017 accounting year as 6,707 million euros and the net profit as 2,908 million euros. TVH’s operating profit was 3,694 million euros.

TVH Board Member Ergo Blumfeldt explained that TVH has been developing according to the approved business plan as an investment company in the transport sector with lower than average risks and a conservative capital structure. He added that the most important event of the 2017 financial year was the acquisition and lease of two additional Bombardier CRJ900 type aircraft. He explained that TVH issued 25 million euros worth of bonds subscribed by AS LHV Pank and funds administered by LHV to finance the transaction.

TVH owns and leases six Bombardier CRJ900NG-type passenger jet aircraft. The long-term lessee of TVH’s aircraft is Estonia’s national airline AS Nordic Aviation Group (Nordica). In the 2018 financial year, TVH is aiming for a turnover of approximately 7.8 million euros.

 

Further information and questions:

Ergo Blumfeldt

Member of the Management Board

OÜ Transpordi Varahaldus

Ergo.Blumfeldt@triniti.ee

+372 513 82 77

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2.9 million profit for TVH in 2017

According to the audited results of the 2017 financial year of OÜ Transpordi Varahaldus (TVH) the profit for the 2017 financial year was 2.9 million euros at a turnover of 6.7 million. The annual report of the company was audited by AS Deloitte Audit Eesti.

TVH is a state-owned private limited liability company founded on September 30, 2015 by the Republic of Estonia as a sole shareholder with the objective of operating as an investment firm financing and managing fixed assets in the field of transport (including acquisition and lease). The company owns six Bombardier CRJ-900 NG 88-seater passenger aircraft.

According to the member of the management board of TVH Ergo Blumfeldt, the most important event of the 2017 financial year was an increase in the aircraft fleet from four planes to six. In summer 2017, TVH acquired two vintage Bombardier CRJ-900 NG passenger aircrafts, which are leased to the Estonian national airline Nordica and operated by Regional Jet, a joint venture between Nordica and the Polish National Airline LOT. The transaction was funded by the issue of bonds of 24 million euros, which were subscribed in equal parts by LHV Pank and LHV funds.

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The first financial year for TVH ends in profit

At the May 25, 2017 annual general meeting of shareholders of OÜ Transpordi Varahaldus (TVH) Kadri Simson, Estonian Minister of Economic Affairs and Infrastructure, approved the state company’s first annual report, which indicates the Company’s turnover for the 2015–2016 accounting year as 3,177 million euros and the net profit as 3,092 million euros.

TVH’s first commercial profit was 1,908 million euros and financial income 1,184 million euros. The first annual report of the Company in the state’s sole ownership was audited by AS Deloitte Audit Eesti.

“The source of the financial income was the value increase of the repair reserve resulting from strengthening of the dollar against the euro,” explained TVH Board Member Ergo Blumfeldt.

Blumfeldt added that the Company commenced its economic activity by acquiring from Export Development Canada, a Canadian export agency, a loan agreement and related collateral for three CRJ900 type aircraft. In August 2016 TVH acquired another CRJ900 aircraft. The long-term lessee of all TVH’s aircraft is Estonia’s national airline AS Nordic Aviation Group (Nordica).

Blumfeldt says that this financial year TVH is planning to acquire and rent out two additional Bombardier CRJ900 type aircraft and so as to finance the transaction has issued 25 million euros worth of bonds subscribed for by AS LHV Pank and funds administered by LHV. In the 2017 financial year TVH is aiming for a turnover of approximately 7 million euros.

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