Aerotranscargo FZE hires banks for planned $300 million bonds

BY Reuters | CORPORATE | 09/08/22 06:29 AM EDT

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. was hired as global coordinator and bookrunner and Emirates NBD Capital 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)

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