Wesco Aircraft Holdings Inc., a distributor of airplane parts that does business as Incora, faces a cash crunch as depressed demand for new airplanes weighs on earnings and the company grapples with a high debt load, WSJ Pro Bankruptcy reported. Wesco’s cash dwindled to just enough to cover an interest payment it made this week, while another big interest payment is due in May. The Fort Worth, Texas-based company, which took on about $2 billion in debt in a leveraged buyout by Platinum Equity in early 2020, has struggled with weak demand for parts from aircraft manufacturers since the onset of the COVID-19 pandemic. Early this week, the company reported that cash on hand had dwindled to $117 million as of the end of September, before it paid out $110 million in interest on debt this week, according to the people. Wesco has another coupon payment of more than $100 million coming due in May. The company’s cash balance was slightly higher than the $104 million in the prior quarter ended in June, according to an August report by ratings firm Moody’s Investors Service. The company’s liquidity is likely to remain weak throughout 2021, according to the Moody’s report. The company’s earnings have fallen far short of projections it provided to debt investors in early 2020 when it agreed to be bought out by Platinum Equity, as orders for new aircraft slowed sharply since the pandemic, the people said. Wesco reported earnings before interest, taxes, depreciation and amortization for the 12 months ended in September of about $80 million, compared with the company’s projections of $350 million in annual Ebitda when Platinum closed the buyout in January 2020.
