Robert Weil is a son of refugees, a patron of the arts and an ardent campaigner against social inequality and nationalism. He is also a billionaire financier who knows the importance of shoring up an investment portfolio when the need arises.

And in recent times, the Swedish tycoon, by his own admission a contrarian investor, did just that. His target? A Dublin aircraft leasing business with liabilities stretching to more than $100 million.

Proventus Capital Partner, Weil’s investment giant, is one of the main backers of Montrose Global Aircraft Management (MGAM), a Dublin firm that leases small planes to small, regional airlines.

Proventus has now moved to take control of the lessor, installing a share receiver over two main companies within the group. Declan Taite, a managing director of accountancy firm Duff & Phelps, has been appointed by the company.

On foot of this appointment, Taite is beginning to flood the board of 24 subsidiaries as part of his receivership. The appointment of a share receiver is extremely rare, and essentially gives the lender control of the assets through control over the group companies. The move was previously used in the receivership of the Quinn Group by the former Anglo Irish Bank.

Montrose is small by the standards of the global aviation leasing giants that are incorporated in Dublin – like Domhnal Slattery’s Avolon and Gus Kelly’s AerCap. Yet, it still has a sizable balance sheet and a customer base stretching from the Cayman Islands in the Caribbean to Tonga in the Pacific.

It is also in a sector experiencing a chill wind as a result of Covid-19. So, just who is behind it, and why did Weil opt to pull the trigger on the share receivership?

Made in (Bank of) America

MGAM was founded in 1999 by Bank of America and Capital Group as a lease manager for international aircraft and rail assets. It expanded over time and began sourcing capital, arranging transactions and ultimately became a fully fledged aircraft lessor.

It became independent from Bank of America a decade later, with businessman Robert Eyre taking ownership. Company records show that Robert and Diana Eyre own the share capital of many of the companies in the group.

Before joining Montrose, he was managing director and head of Bank of America Leasing and Capital International Department for 15 years. According to a company bio, he has “arranged, structured and managed over $18bn of aircraft transactions with lessors in multiple jurisdictions including the United States, Japan, Germany, Hong Kong, Singapore, Malaysia, Australia, Ireland, Sweden, Spain, France, and the United Kingdom.”

Like many aviation companies, it set up its corporate headquarters in Dublin. Most of its planes are small propeller operated aircraft such as the Cessna 208B Grand Caravan or The Viking DHC-6 Series 400 Twin Otter. And for much of its time in Dublin, it has been profitable and successful.

The most recent accounts for the main group company, Montrose Global Aircraft Leasing, are historic and date back to 2017. But they do offer insight into the size and scale of Montrose.

In that year, it made a profit of $13.5 million, a sharp turnaround on the previous year when it posted a €2.3 million loss. Much of the swing was attributed to a $15 million profit on the sale of 75 per cent shareholding in a group subsidiary. Revenues increased from $10.5 million to $15 million.

The company valued its fleet of 23 aircraft at €117 million. The aircraft were largely funded by debt. It had unsecured loans of $17 million and secured borrowings of €77 million. Its main financiers were Proventus in Sweden and Multi-Act Enterprises.

The secured loans comprise three separate facilities and carry interest rates of between 6% and 9.85% – all three were due for repayment in 2020 and 2021. The unsecured borrowings were due to be repaid next year and carried a 12 per cent coupon.

Legal Battle

Filings in the UK show that Proventus has launched a commercial lawsuit in London against the Eyres personally seeking the recovery of €16 million ($18.36 million) alleged to be due on loans of €21.8 million ($25 million) issued to the Irish arm of Montrose in 2016.

In the action, it is claimed that the Eyres, a married couple with an address in Kensington, London, guaranteed borrowings to their aircraft leasing company that are now allegedly in default after a repayment date was missed. In court filings, Proventus says it called in all outstanding debts and interest owing, as immediately due, on May 13 last.

Montrose was given 24 hours to satisfy the debt. When the loan was not discharged, Proventus moved to sue on the foot of loan guarantees allegedly given by the Eyres. The investment firm also relies on a deed of charge it holds over the shares in Montrose Global. The financier claims it is entitled to interest of 14 per cent per year (€6,234.93 per day) on the loan until such time as judgment in the case is delivered. Proventus is represented by the one of the world’s largest law firms Baker McKenzie which is headquartered in Chicago.

As a global business entity, Montrose generates its revenues from Australia, Cayman Islands, the UK, the US, Sweden, Rwanda, Mexico, Malaysia, Kenya and Indonesia, filings show.

Each plane is held in a separate entity, all of which are incorporated in Ireland. It will now fall to Taite and his team at Duff & Phelps to unpick the byzantine structure and manage the business and manage the business over the company weeks and months.