Aerotranscargo FZE hires banks for planned $300 million bonds

Oppenheimer Holdings

08/09/2022 11:29

By Yousef Saba
    DUBAI, Sept 8 (Reuters) - Aerotranscargo FZE, a dedicated
freighter airline, has hired banks to arrange the sale of $300
million in five-year senior unsecured bonds that it will use
largely to expand its fleet, an investor presentation showed.
    Oppenheimer & Co. Inc.  OPY.N  was hired as global
coordinator and bookrunner and Emirates NBD Capital  ENBD.DU  as
joint global coordinator and bookrunner, the presentation,
reviewed by Reuters, and a bank document showed. 
    They will hold a global investor call on Monday, after which
a bond offering may follow, subject to market conditions, the
bank document said.
    The proposed bonds will be non-callable for three years, the
presentation showed.
    The Air Operator's Certificate (AOC) for Aerotranscargo FZE,
which is headquartered in Sharjah, the United Arab Emirates, is
"provided by" Aerotranscargo SRL, a Moldovan entity that is 49%
owned by Aerotranscargo FZE's 100% shareholder and Chairman
Guneet Mirchandani, according to the investor presentation.
    According to the presentation, Mirchandani is the majority
shareholder of UK-based Air One Aviation Limited, which is the
"exclusive global sales agent" for Aerotranscargo FZE and
receives a fixed commission of 7.5% of revenue.
    Of the targeted $300 million proceeds, it plans to use $250
million to "increase lift capacity of the fleet through the
acquisition of long-range wide-body cargo aircraft and engines
(including B777 and/or B747 aircraft)," the presentation said.
    The company plans to use $22.5 million for general corporate
purposes, $20 million to buy and/or build a new headquarters in
Sharjah and $7.5 million for transaction fees and expenses.
    The company posted $291.8 million in revenue in the first
half of this year from $185.2 million in the first half of 2021,
results that have not been audited showed in the presentation. 
    Net profit was $87.4 million in the first half of this year,
up 29.9% from $51.5 million in the same period of 2021.
    The planned debt sale has restrictive covenants including
limitations on additional debt, dividends, asset sales and
transactions with affiliates, the presentation showed.
Incurrence covenants include a leverage ratio less than or equal
to 3x and an interest coverage ratio of greater than or equal to
2.5x.
    

 (Reporting by Yousef Saba; editing by David Evans)
 ((Yousef.Saba@thomsonreuters.com; +971562166204; https://twitter.com/YousefSaba))