MIAMI, Aug. 02, 2023 (GLOBE NEWSWIRE) -- Global Crossing Airlines Group, Inc. (JET: NEO; JET.B: NEO; JETMF: OTCQB) (the “Company” or “GlobalX”) is pleased to announce the closing of the placement of US$35 million of Senior Secured Notes due 2029 (the “Financing”) with funds managed by Axar Capital Management LP and its affiliates (the “Investors”), a value-oriented alternative investment firm with over US$2.3 billion in assets under management.

“GlobalX is excited to welcome Axar as our financing partner as we continue to expand our fleet and capitalize on the growth that our platform is driving. Axar’s experience in the aviation sector and its focus on funding high growth companies such as GlobalX make them the ideal partner and a validation of our business model and the platform that our management and employee partners have built,” said Ed Wegel, Chairman and CEO of GlobalX. “The proceeds from the notes will refinance all of the Company’s existing indebtedness and provide GlobalX the capital required to continue to execute on our growth plan and expand our passenger and freighter aircraft fleet currently at 11 aircraft and expected to be at least 16 by the end of 2023.”

“GlobalX has a significant opportunity to expand its offering in charter and cargo operations, serving a unique and durable customer base,” said Andrew Axelrod, Founder and Managing Partner at Axar Capital. “We are pleased to be a partner to GlobalX to facilitate a simplification of the company’s capital structure and support the company’s growth objectives.”

The Financing consisted of the sale of US$35 million of Senior Secured Notes (the “Notes”) and accompanying warrants to purchase the Company’s common stock.

The terms of the Notes include:

  • A 6-year term and Maturity Date of August 2, 2029
  • The Notes will bear interest at a fixed rate of 15% per annum and include an upfront fee of 1.75% of the principal payment;
  • The Company will be permitted to prepay all (but not less than all) of the Notes as follows beginning on August 2, 2025 subject to a redemption premium;
  • The Investors as a group will be granted one board seat and one board observer seat;
  • At closing, the Investors will be issued 10 million warrants (each, a “Warrant”) exercisable into one share of common stock at an exercise price of US$1.00 per share, with such warrants expiring on June 30, 2030;
  • Each of the Company's material subsidiaries will guarantee the Notes;
  • The Notes and the related guarantees will be secured by a lien on substantially all of the property and assets of the Company and the guarantors of the Notes; and
  • As part of the financing, Andrew Axelrod, Axar’s Founder and Managing Partner, will join the Board of Directors of GlobalX on August 3, 2023.

The net proceeds of the Financing will be used to repay all of the Company’s existing US$6,000,000 existing senior secured debentures and all of the US$2,500,000 interim shareholder unsecured loan, with the balance expected to be used for general corporate purposes, including the transaction expenses and deposits to expand its current fleet of aircraft.

Jefferies acted as structuring agent and Jefferies and Roth Capital Partners acted as joint placement agents.