Gogo Completes Sale of Commercial Aviation Business to Intelsat

Rhea-AI Summary

On December 1, 2020, Gogo announced the successful sale of its Commercial Aviation business to Intelsat for $400 million in cash. This transaction strengthens Gogo's financial position, reducing net debt and enabling investment in growth opportunities like Gogo 5G. Post-sale, Gogo has about $460 million in cash and $770 million in net debt. The company plans a comprehensive refinancing by May 2021 to align its balance sheet and reduce interest expenses. Gogo remains focused on the business aviation market, leveraging its ATG network and proprietary spectrum.

Positive

• Gogo completed the sale of its Commercial Aviation business for $400 million, enhancing financial stability.
• Transaction reduces net debt and provides cash for growth investments such as Gogo 5G.
• Post-sale, Gogo holds $460 million in cash, strengthening its financial position.

Negative

• None.

CHICAGO, Dec. 1, 2020 /PRNewswire/ -- Gogo Inc. (NASDAQ: GOGO) ("Gogo") today announced it has completed the sale of its Commercial Aviation (CA) business to a subsidiary of Intelsat S.A. (OTC: INTEQ) ("Intelsat") for $400 million in cash. Gogo will continue as a publicly traded company, now singularly focused on leveraging its ATG network and proprietary spectrum to serve the business aviation market. The proceeds from the transaction significantly strengthen Gogo's financial position by reducing its net debt position and enhancing the company's ability to invest in growth opportunities, including Gogo 5G.

"The completion of the sale of our CA business to Intelsat marks the beginning of a new chapter for Gogo; we are a leader in business aviation and now turn our singular focus toward serving that attractive market," said Oakleigh Thorne, President and CEO of Gogo. "Our business aviation division has proven resilient in the face of the COVID-19 pandemic, as the number of business aircraft online today has nearly returned to January levels.

"Looking forward, we see great opportunity to create value for our customers, employees and shareholders," Thorne said. "And on behalf of all of us at Gogo, I want to extend my sincere thanks to the talented CA team that joins Intelsat today. The opportunities that await them are a testament to their unwavering dedication and commitment to Gogo and their aviation partners."

Immediately following closing, and after Gogo's $53 million semi-annual interest payments in November, Gogo had approximately $460 million in cash-on-hand and net debt of approximately $770 million. As previously disclosed, Gogo intends to undertake a comprehensive refinancing prior to the first call date of its senior secured notes in May 2021 to align its balance sheet with its new business structure, reduce its interest expense, and facilitate the repayment at maturity of Gogo's convertible notes, of which $238 million aggregate principal amount are currently outstanding.

Gogo expects to provide an update on its strategic and long-term financial planning process on its fourth quarter earnings call.

About Gogo

Gogo is the leading global provider of network and broadband connectivity products and services for the business aviation market. We offer a customizable suite of smart cabin systems for highly integrated connectivity, in-flight entertainment and voice solutions. Gogo's products and services are installed on thousands of business aircraft of all sizes and mission types from turboprops to the largest global jets, and are utilized by the largest fractional ownership operators, charter operators, corporate flight departments and individuals.

There are more than 1,500 business aircraft currently flying with Gogo's AVANCE L5 or L3 installed. As of September 30, 2020, Gogo reported 5,577 aircraft flying with its air-to-ground (ATG) systems onboard, and 4,737 aircraft with satellite connectivity installed. Connect with us at business.gogoair.com.

Investor Relations Contact:		Media Relations Contact:
Will Davis		Bryan Locke and Lindsay Molk
+1 312-517-5725		Sard Verbinnen & Co
ir@gogoair.com		Gogo-SVC@sardverb.com

 

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SOURCE Gogo

FAQ

What is the sale price of Gogo's Commercial Aviation business?

Gogo sold its Commercial Aviation business to Intelsat for $400 million in cash.

How does Gogo's sale affect its financial position?

The sale reduces Gogo's net debt and increases cash reserves, bolstering its financial position.

What future plans does Gogo have after selling its CA business?

Gogo plans to focus on business aviation and invest in growth opportunities like Gogo 5G.

What is Gogo's net debt after the sale of its CA business?

After the sale, Gogo has approximately $770 million in net debt.

When does Gogo plan to refinance its debt?

Gogo intends to undertake a comprehensive refinancing before May 2021.