October 21, 2024
Debt market intelligence site 9fin is reporting Vista Global is working with Jefferies on a preferred equity raise of up to $1 billion.
Two seasoned financial reporters for debt-market intelligence website 9fin are reporting XO, and VistaJet parent Vista Global is working with Jefferies on a “potential preferred equity raise.”
The report by Will Caiger-Smith and Max Frumes cites unnamed sources.
A spokesperson for Vista Global tells Private Jet Card Comparisons, “We do not comment on rumors.”
According to 9fin, “The size of the potential deal could be between $600m and $1bn, according to sources. Proceeds would be used, among other things, to help fund amortization payments on the company’s aircraft leases.”
The report states, “While it’s been clear for some time that VistaJet needs to raise cash, the founder’s large ownership stake has been a significant factor in discussions around how such a capital raise should be structured.”
Vista’s founder and chairman, Thomas Flohr, is believed to hold over 80% of the company.
The 9fin story said a source called VistaJet “very investible” and added, “it could ‘easily’ find a buyer for a minority equity stake if it wanted; however, such a deal would dilute existing shareholders.”
Sources told 9fin, “The company is understood to have explored the possibility of raising term loan debt but would likely struggle to do so because of its cash flow profile,” adding, “The proceeds raised through the new preferred instrument would help address that.”
Per 9fin, “Its most recent deal was a $500m bond issue in May 2023, which carries a 9.5% coupon and matures in 2028.”
Privately held Vista’s finances have been publicly scrutinized since a May 2023 story in the Financial Times.
The story pointed to its increasing debt, net losses, and deferred revenues to cash ratio.
Much of the material in the FT story came from the 512-page bond prospectus.
The financial document was available via non-disclosure agreements and sold out in several hours.
Flohr answered the criticisms on CNBC, saying the company was highly profitable on an EBITDA basis, attributing the debt to funding its expansion and saying it had sufficient cash to fund member flights.
Earlier this year, Vista sued AirX, a much smaller Malta-based charter operator, for 386 million euros as the source of confidential documents passed to the media and suppliers.
9fin also noted, “Trading levels have improved across the company’s debt complex this year, after a tough time in late 2023 amid legal fights and liquidity concerns; the rebound reflects solid revenue growth in recent quarters, according to sources.”
In August, we exclusively reported Vista was selling its Citation Ultra light jet and Citation X fleet.
The fleets are based in the U.S.
However, the latest FAA data shows that XOJet Aviation has 23 Cessna-made super-midsize jets on its operating certificate.
Through June, Vista’s U.S. operators had moved into third place on our list of largest North American charter/fractional operators.
It is behind NetJets and Flexjet per ARGUS data.
Despite the media attention about its finances, Vista’s two brands remain popular choices with flyers.
VistaJet offers the Challenger 300/350 stand-up super-midsize cabins in its Program jet card.
Most jet cards don’t guarantee a stand-up super-midsize cabin.
Members can also book and cancel domestic flights on 24-hour notice compared to as much as 120 hours for other Challenger super-mid jet cards.
The daily minimum is just 72 minutes, including taxi time.
Many jet card super-mid programs charge 120 minutes as the daily minimum, making them expensive for short flights.
At the top end, its ultra-long-range Bombardier Global private jets offer similar short-notice book and cancel benefits.
Jet card members get fixed-hourly occupied hours pricing globally.
It’s pretty much the only product of its type.
XO doesn’t offer fixed rates but typically offers market-leading prices up and down the U.S. East Coast and for transcontinental flights, making it a prominent value player.
It also enables members to sell and buy unused seats.
35.8% of Private Jet Card Comparisons subscribers are interested in jet-sharing and by-the-seat options.
Read the 9fin report here.
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