AeroCentury Corp. (NYSE MKT: ACY) said it has reached a new management agreement with its current management company, JetFleet Management Corp. which continues JMC´s management services through August 2025 and provides AeroCentury with significant enhancements over the prior management agreement.
The terms of the contract with JMC provide AeroCentury with a number of continuing and new benefits including:
Comprehensive management services, under which JMC continues to assume full responsibility for payment for all employee salaries and benefits, outside technical services, worldwide travel needed to promote AeroCentury´s business, office space, utilities, IT and communications, furniture and fixtures, and other general administrative and overhead costs;
A management fee that, as with the prior agreement, is based on overall portfolio size, which will continue to protect AeroCentury against unanticipated administrative, office space, and personnel cost increases;
Continuity of services of JMC´s highly experienced management team, which provides a seamless transition through lease terms and financing renewals;
An option right granted to AeroCentury for the acquisition of JMC;
A new provision whereby JMC has agreed not to manage portfolios for identified AeroCentury competitors;
Revised termination clauses that increase AeroCentury´s flexibility;
Added breakpoints in the management fee rate, based on portfolio size, which will generate economies of scale as AeroCentury´s portfolio grows; and
Added provisions that ensure continuing AeroCentury visibility into JMC´s financial status.
AeroCentury is an aircraft operating lessor and finance company specializing in leasing regional aircraft and engines utilizing triple net leases. AeroCentury´s aircraft and engines are leased to regional airlines and commercial users worldwide.