November 22, 2024
Bloomberg is reporting that VistaJet, XO parent owner Thomas Flohr told investors his 86% stake could be used to raise cash.
Vista Global Chairman Thomas Flohr told investors that his 86% stake in the company he founded provides “an enormous equity cushion in the business which can be accessed to bolster liquidity.”
The news comes from a Bloomberg analysis of the company’s non-public 2023 financials, which are provided to bond investors.
According to Bloomberg, Vista Global’s EBITDA in 2023 dropped to $801 million from $845 million.
Revenues increased 7% year-over-year to $2.6 billion.
Debt increased to $3.9 billion, a jump of $133 million.
Fixed costs, including staff and operating costs, were $684 million in 2023, a 30% jump.
Liquidity was “more than double” at $270 million, per the business website.
Bloomberg did not provide additional information about Vista’s 2023 results.
The Bloomberg report also continues with what is now a public battle between Vista Global and a much smaller rival.
The parent of VistaJet and XO has been under scrutiny since the Financial Times published an article last May based on its $500 million 2023 bond offering.
The story, titled “Private Jet Disrupter: The debt-fueled ascent of Thomas Flohr’s VistaJet,” outlined the company’s net losses during the previous four years, growing debt, and a deficit of cash to prepayments for future flights, known as deferred revenue.
Multiple additional reports highlighting its finances in German media followed.
In 2022, as part of its plans to scale up, Vista bought Air Hamburg, the largest Germany-based private jet operator.
Since 2018, it has also snapped up operators XOJet, Red Wing Aviation, Talon Air, and Jet Edge, plus brokers JetSmarter, Apollo Jets, and Camber.
Since then, Vista has grown to be the third-largest private jet flight provider in North America, the world’s largest private aviation market.
Last month, Bloomberg reported that the negative articles about Vista’s finances were part of an orchestrated effort by a competitor.
Its story, “WhatsApps, Fake Names and an Alleged Conspiracy Against VistaJet,” revealed via court filings from an unrelated case against Flohr that the stories were part of an alleged secret six-year campaign by smaller rival AirX and its Chairman, John Matthews.
Bloomberg wrote in part:
The aim, according to the WhatsApp messages submitted to the court — which Flohr’s lawyers said were released to him by a whistleblower — was to harm the interests of Flohr, and to benefit from VistaJet’s potential demise.
Private group messages obtained by Vista and provided in court filings showed that for several years, AirX executives had been feeding reporters financial documents typically limited to investors under confidentiality agreements, pitching the journalists that a Vista failure was imminent and would be bad for the industry and consumers.
After the FT story last May, Matthews told members of the private group, mainly AirX employees:
We have accomplished a remarkable feat, and I would like to extend my congratulations to everyone involved. It is interesting to watch, but we should now step away from media and opportunity. This subject has been a major part of my life for six years, and I think it’s time to move on. This WhatsApp group is intended for monitoring articles to keep ourselves updated on the situation, as well as keeping track of comments in case our company is mentioned. However, I would like to request that we refrain from actively seeking media coverage for the company. Let’s go back into the shadows and close equity. Get media coverage for the promotion of our business but not to cover the downfall or troubles of Vista. I need to move forward and let go of this burden that’s been weighing me down. Cheers.”
At the same time, the group chats show AirX executives discussing how they could take advantage of the turmoil they were creating by acquiring aircraft Vista Global was managing and how a Vista grounding could enable them to raise their prices.
In one note, Matthews tells colleagues, “It is imperative to have this information as the grounding of the fleet necessitates an immediate increase in our rates. We could easily add on €1k an hour.”
Lawyers for Matthews and AirX have “vigorously” denied the allegations of conspiring with financier Tim Horlick, a partner of Flohr prior to his founding of VistaJet, and who is currently pursuing litigation against Flohr.
Matthews reposted the most recent Bloomberg article, noting, “I do not doubt that our sector media will purposefully overlook this recent article on Bloomberg as it contradicts the prevailing narrative of ‘record trading’ and ‘all is well.’ It’s incredibly shameful that our media sector seems to lack the moral compass necessary to inform consumers, the sector, and readers of genuine news, instead, more often then not choosing to attack anyone who advocates for the truth.”
After a January 2024 report by The Wall Street Journal titled “How One Debt-Laden Company Could Create a Storm for Private Jets” discussed how a Vista failure could impact Bombardier, his rival’s supplier of new private jets, Matthews wrote in the group, “Bombardier lost $300m on share price today.”
Prior to the WSJ article’s publication, Matthews had told his private online group, “The Wall Street Journal lawyer’s call is this evening; if they remain intimidated by Vista’s letters, then I’m afraid it’s all been for nothing. If, however, they can support the journalist’s request to print because it’s all factual, then the blow will be delivered tomorrow morning.”
Matthews, whose fleet includes older and smaller large-cabin preowned jets compared to Vista’s fleet of newer, larger Global jets directly from the manufacturer, has complained that his larger rival undercuts his prices.
In his introduction to reposting the most recent report on Vista’s finances, Matthews also wrote, “Oh, and to be clear to those looking to blame me for this, let me clear the air before someone pins me as the ‘puppet master of Bloomberg’s news terminal’ or the ‘brain behind some vast conspiracy.’ I must declare that I’ve never exchanged so much as a mysterious glance with the journalist reporting those losses.”
In February, Vista issued a press release with its public summary of the company’s 2023 results.
The company doesn’t disclose specifics, so it is more of a series of highlights.
Flohr said in the release: “2023 was another year of successful performance in our business. Despite having to react to deep economic shifts and complex geopolitical uncertainty, we produced double-digit growth across all markets — achieved while refurbishing and upgrading our fleet ahead of schedule, further improving our service standards and significantly increasing aircraft availability.”
He continued, “Today, Vista is a truly global and recognizable brand all around the world thanks to the 20 years in which we have delivered an unmatched service to our clients, and we are well placed to further increase our market share over the next two decades.”
READ: What happens to your jet card and private jet membership deposits?
According to the most recent Bloomberg report, Flohr continued defending the VistaJet Program and VJ25 offerings, which are positioned as alternatives to fractional ownership.
Flohr wrote his investors, “Vista carries the whole asset risk — and we are happy to do so. While our peers typically offload the asset risk to their clients, we looked at what commercial airlines do, and our balance sheet is no different from theirs.”
After the Financial Times report in 2023, Flohr took to CNBC to dispute the analysis of his finances.
Flohr said the net losses were based on Vista’s decision on how to depreciate aircraft.
He said the company focuses on EBITDA, and the mounting debt was part of a growth cycle.
In 2018, it launched Vista Global as a Dubai-based holding company to facilitate multiple acquisitions. The moves resulted in it tripling the fleet and adding an estimated $400-to-$500 million in off-fleet brokerage revenue.
Flohr dismissed the deficit in cash to deferred revenue, saying that since he owns airplanes, his direct costs to fulfill flights are only in the low 20-cent range.
He also pointed out that the FT chronicle was based on a $500 million bond offering, which was sold out in several hours.
In 2017, Flohr sold equity to Rhone Capital for $200 million, which he said valued the company at $2.5 billion. At that time, VistaJet had 70 aircraft.
Now, Flohr is also saying his 86% stake in the company he founded in 2004 could be used to bolster liquidity.
READ: Here’s what you need to know about VistaJet before you buy
Bloomberg reported Flohr told investors he plans to “materially” decrease the company’s debt.
Vista also restated some 2022 numbers.
It now says it owned $5 billion in aircraft, with $393 of its fleet on leases.
Originally, it had said it owned $3 billion with $2.3 billion on leases.
Bloomberg did not specify the cause of the discrepancy but noted Vista Global had changed auditors to PWC.
A Vista Global spokesperson declined to comment on the Bloomberg report about its 2023 financials.
READ: Jet It Lessons: What happens when your private jet provider fails?
(Editor’s Note @ 5:09 EST on April 14, 2024: An earlier version of this story referred to a Wall Street Journal article from January 2023. It was published in January 2024.)
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