Surf Air Mobility Secures $50 Million Financing to Fund Transformation Plan and Path to Profitability
Surf Air Mobility has secured a $50 million financing package from Comvest Partners, comprising a $44.5 million term loan and a $5.5 million delayed draw term loan. The four-year facility, priced at SOFR +5%, aims to strengthen the company's balance sheet and fund its transformation plan. The company has outlined a four-phase transformation strategy including: completed transformation phase with improved capital structure, optimization phase (2025-2026) focusing on airline operations, expansion phase (2026-2027) for tier 1 routes growth, and acceleration phase (2027+) implementing electrification technologies.
Surf Air Mobility ha ottenuto un pacchetto di finanziamento di 50 milioni di dollari da Comvest Partners, che comprende un prestito a termine di 44,5 milioni di dollari e un prestito a termine ritardato di 5,5 milioni di dollari. La struttura di quattro anni, con un tasso di interesse di SOFR +5%, ha l'obiettivo di rafforzare il bilancio dell'azienda e finanziare il suo piano di trasformazione. L'azienda ha delineato una strategia di trasformazione in quattro fasi, che include: fase di trasformazione completata con una struttura di capitale migliorata, fase di ottimizzazione (2025-2026) focalizzata sulle operazioni aeree, fase di espansione (2026-2027) per la crescita delle rotte di classe 1, e fase di accelerazione (2027+) per l'implementazione delle tecnologie di elettrificazione.
Surf Air Mobility ha asegurado un paquete de financiamiento de 50 millones de dólares de Comvest Partners, que incluye un préstamo a plazo de 44.5 millones de dólares y un préstamo a plazo diferido de 5.5 millones de dólares. La instalación de cuatro años, con un precio de SOFR +5%, busca fortalecer el balance de la empresa y financiar su plan de transformación. La compañía ha esbozado una estrategia de transformación en cuatro fases que incluye: fase de transformación completada con una estructura de capital mejorada, fase de optimización (2025-2026) centrada en las operaciones aéreas, fase de expansión (2026-2027) para el crecimiento de rutas de nivel 1, y fase de aceleración (2027+) para la implementación de tecnologías de electrificación.
서프 에어 모빌리티는 콤베스트 파트너스(Comvest Partners)로부터 5천만 달러의 자금 지원을 확보했습니다. 이 자금은 4천450만 달러의 기간 대출과 5백50만 달러의 지연 인출 기간 대출로 구성되어 있습니다. 4년 동안의 이 시설은 SOFR +5%의 이율로 이루어져 있으며, 회사의 재무 상태를 강화하고 전환 계획을 자금 조달하기 위해 설계되었습니다. 이 회사는 4단계 전환 전략을 제시했으며, 여기에는: 자본 구조 개선이 완료된 전환 완료 단계, 항공사 운영에 중점을 둔 최적화 단계(2025-2026), 1단계 노선 성장을 위한 확장 단계(2026-2027), 그리고 전기화 기술 구현을 위한 가속화 단계(2027+)가 포함됩니다.
Surf Air Mobility a sécurisé un package de financement de 50 millions de dollars auprès de Comvest Partners, comprenant un prêt à terme de 44,5 millions de dollars et un prêt à terme à tirage différé de 5,5 millions de dollars. Cette facilité de quatre ans, avec un taux fixé à SOFR +5%, vise à renforcer le bilan de l'entreprise et à financer son plan de transformation. L'entreprise a esquissé une stratégie de transformation en quatre phases incluant : une phase de transformation achevée avec une structure de capital améliorée, une phase d'optimisation (2025-2026) axée sur les opérations aériennes, une phase d'expansion (2026-2027) pour la croissance des routes de niveau 1, et une phase d'accélération (2027+) pour la mise en œuvre des technologies d'électrification.
Surf Air Mobility hat ein Finanzpaket über 50 Millionen Dollar von Comvest Partners gesichert, das ein Term Darlehen über 44,5 Millionen Dollar und ein verzögertes Term Darlehen über 5,5 Millionen Dollar umfasst. Die vierjährige Finanzierung mit einem Zinssatz von SOFR +5% zielt darauf ab, die Bilanz des Unternehmens zu stärken und seinen Transformationsplan zu finanzieren. Das Unternehmen hat eine Transformationsstrategie in vier Phasen skizziert, die Folgendes umfasst: abgeschlossene Transformationsphase mit verbesserter Kapitalstruktur, Optimierungsphase (2025-2026) mit Fokus auf Fluggesellschaftsbetrieb, Expansionsphase (2026-2027) zum Wachstum von wichtigsten Routen und Beschleunigungsphase (2027+) zur Implementierung von Elektrifizierungstechnologien.
- Secured $50 million financing package at favorable SOFR +5% rate
- Reduced liabilities and strengthened balance sheet
- Lower cost of capital and minimized potential shareholder dilution
- Current liquidity constraints requiring immediate financing
- Extended timeline for profitability with transformation plan reaching 2027+
Insights
This
The four-phase transformation plan appears well-structured, though ambitious. The immediate focus on optimization (2025-2026) should drive operational efficiencies and improve unit economics. The partnership with Palantir Technologies for proprietary software development adds technological credibility to their expansion plans. However, investors should note that the later phases, particularly the electrification initiatives, carry execution risks and require significant capital investment.
The strategic restructuring positions Surf Air to capitalize on the fragmented regional aviation market. Their approach to modernizing regional air mobility through software integration and eventual electrification aligns with industry trends toward efficiency and sustainability. The partnership with Comvest Partners, a credible institutional investor, validates their business model and transformation strategy.
The focus on optimizing airline operations before expanding routes is prudent, as regional airlines typically struggle with operational efficiency and route economics. The
Company Receives Four Year Term Loan from Comvest Partners, a Multi-Billion-Dollar Investment Management Firm
At SOFR +
Robust Cash Position Enables New Management Team to Advance Four Phase Transformation Plan
Oliver Reeves, Chief Financial Officer, said: “Today we have fundamentally restructured our balance sheet – addressing our near-term liquidity constraints, lowering our cost of capital, minimizing potential dilution under our equity share subscription facility, and repositioning Surf Air Mobility for profitable growth. Alongside this transaction, we have reduced liabilities and, as a result, have significantly strengthened our balance sheet. We are now poised to optimize the structure of our business and capitalize on the opportunities before us.”
This financing is a catalyst for the Company to initiate the next phase of its transformation, which will allow the Company to achieve its long-term goal of introducing software and electrified aircraft to become the world’s premier regional air mobility platform.
The 4-phase transformation plan includes:
- Phase 1: Transformation (complete) – Improved capital structure, strengthened balance sheet, put a new management team in place, and realized operational synergies from the Southern Airways merger
- Phase 2: Optimization (2025-2026) – Optimize airline operations, recalibrate the On Demand business, and drive efficiencies from SurfOS
- Phase 3: Expansion (2026-2027) – Rapidly expand tier 1 routes by leveraging improved business infrastructure and proprietary software developed with Palantir Technologies (NYSE: PLTR)
- Phase 4: Acceleration (2027+) – Grow revenue and margins by implementing electrification technologies and expanding technology platform
Deanna White, Interim CEO and Chief Operating Officer, said: “As we enter the next phase of our transformation plan, we are focused on optimizing operations and capital allocation to meaningfully improve profitability in the near term. As we look further ahead, phases three and four of our plan will allow us to become the technology-enabled platform best positioned to capture a significant share of the
The Company noted that a copy of its term loan agreement and related agreements will be filed with the Securities and Exchange Commission on November 14, 2024.
About Surf Air Mobility
Surf Air Mobility is a
Forward-Looking Statements
This Press Release contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995, including statements regarding the anticipated benefits of the transaction; Surf Air Mobility’s implementation of its transformation strategy; Surf Air Mobility’s ability to anticipate the future needs of the air mobility market; future trends in the aviation industry, generally; Surf Air Mobility’s profitability and future financial results; and Surf Air Mobility’s balance sheet and liquidity. Readers of this release should be aware of the speculative nature of forward-looking statements. These statements are based on the beliefs of Surf Air Mobility’s management as well as assumptions made by and information currently available to Surf Air Mobility and reflect Surf Air Mobility’s current views concerning future events. As such, they are subject to risks and uncertainties that could cause actual results or events to differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, among many others: Surf Air Mobility’s future ability to pay contractual obligations and liquidity will depend on operating performance, cash flow and ability to secure adequate financing; Surf Air Mobility’s limited operating history and that Surf Air Mobility has not yet manufactured any hybrid-electric or fully-electric aircraft; the powertrain technology Surf Air Mobility plans to develop does not yet exist; any accidents or incidents involving hybrid-electric or fully-electric aircraft; the inability to accurately forecast demand for products and manage product inventory in an effective and efficient manner; the dependence on third-party partners and suppliers for the components and collaboration in Surf Air Mobility’s development of hybrid-electric and fully-electric powertrains and its advanced air mobility software platform, and any interruptions, disagreements or delays with those partners and suppliers; the inability to execute business objectives and growth strategies successfully or sustain Surf Air Mobility’s growth; the inability of Surf Air Mobility’s customers to pay for Surf Air Mobility’s services; the inability of Surf Air Mobility to obtain additional financing or access the capital markets to fund its ongoing operations on acceptable terms and conditions; the outcome of any legal proceedings that might be instituted against Surf Air, Southern or Surf Air Mobility, the risks associated with Surf Air Mobility’s obligations to comply with applicable laws, government regulations and rules and standards of the New York Stock Exchange; and general economic conditions. These and other risks are discussed in detail in the periodic reports that Surf Air Mobility files with the Securities and Exchange Commission (“SEC”), and investors are urged to review those periodic reports and Surf Air Mobility’s other filings with the SEC, which are accessible on the SEC’s website at www.sec.gov, before making an investment decision. Surf Air Mobility assumes no obligation to update its forward-looking statements except as required by law.
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Source: Surf Air Mobility Inc.
FAQ
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