Qantas Sells Land for Cash
- Etihad Airways has closed a $1.2 billion loan linked to its environmental, social and governance targets. The financing, which Etihad touts as the “first sustainability-linked” loan in global aviation, is tied to its carbon emission reduction targets, socioeconomic programs including the upskilling of Emirati women, and corporate governance practices. The airline did not disclose pricing or maturity for the transaction. HSBC and First Abu Dhabi Bank were joint structuring banks.
- The Lufthansa Group has repaid €1.5 billion ($1.7 billion) in Silent Participation I aid from the German government following the successful closure of its €2.1 billion capital increase. The payment was made earlier than expected with the group planning to pay back the €1 billion Silent Participation II — its last outstanding German state aid — by year-end.
- Qantas Airways has agreed to sell 34 acres of land in the Sydney suburb of Mascot for A$802 million ($595 million). Proceeds from the deal will be used to “reduce debt and accelerate the airline’s recovery.” The property deal, one of many unique ways airlines have raised cash during the crisis, is expected to close early in the new year with the funds contributing to the second half of Qantas’ 2022 fiscal year that ends in June.
- Apollo Global Management will no longer be the majority owner of Sun Country Airlines after a sale of up to 9.78 million shares that launched last week. The private equity firm will sell 8.5 million shares with a 30-day purchase option of another 1.28 million shares in the Minneapolis-based carrier. Gross proceeds from the sale could top $318 million at the purchase price of $32.50 per share. Following the sale, the firm will maintain a stake in Sun Country but no longer hold a majority of shares or voting power in the airline. Apollo bought Sun Country in 2018 and then took it public in a successful IPO this March.
As part of the sale, Sun Country provided an update on its third quarter results. Revenues at the hybrid carrier, which operates scheduled and charter passengers flights, as well as freighters for Amazon, are forecast to be flat to up 2 percent compared to 2019 at $172-175 million. It anticipates an operating profit of $20.5-23.5 million, double its operating profit two years ago.
- Volaris has raised Mexican peso 1.5 billion ($73 million) from the sale of asset-backed trust notes, or certificados bursátiles fiduciarios. The notes carry an interest rate of 200 basis points over Mexican base rate TIIE, and mature in five years. Proceeds will be used for the airline’s growth. The notes are backed by future collection rights on sales through credit card processors.