Surf Air Mobility Enters into Binding Terms for a $35.2 Million Mandatory Convertible Debenture with GEM Global Yield LLC
December 28 2023 - 8:30AM
Business Wire
Parties Agree to Cancel Previously Issued
Shares, Restrict Sales and Redemption Rights, and Increase Capacity
Under $400 Million Share Subscription Facility
Surf Air Mobility Inc. (NYSE: SRFM) (the “Company”), the air
mobility platform transforming regional flying through
electrification, today announced that it entered into a binding
term sheet related to the potential issuance of a mandatory
convertible debenture to GEM. The proceeds will be comprised of the
cancellation of certain shares of the Company’s common stock
previously issued or issuable to GEM.
The Company, in consultation with its Board of Directors,
elected to amend the existing agreements with GEM with objectives
of:
- Reducing near-term overhang: The term sheet contemplates
cancellation of substantially all of GEM's currently issued and
freely tradable shares in SRFM.
- Imposing a volume restriction: The term sheet
contemplates limiting sales of shares related to the debenture to
10% of the Company’s prior 30 days’ average trading volume per
day.
- Flexibility to Redeem: The term sheet contemplates
giving the company the ability to redeem all or part of the
mandatory convertible debenture at 115% of par value at any time,
thereby avoiding dilution.
GEM has also agreed to refresh the Company’s ability to take
both advance drawdowns (up to $100 million) and regular way
drawdowns (up to $300 million) back to full capacity, thereby
allowing the Company to access up to $400 million as originally
contemplated under the Share Subscription Facility with GEM.
The term sheet contains an outline of the terms of the expected
transaction, but all terms described in the term sheet are subject
to further negotiation between the parties, and the final terms of
the transaction will be set forth in the definitive agreements
executed by the Company and GEM.
About Surf Air Mobility
Surf Air Mobility is a Los Angeles-based regional air mobility
platform expanding the category of regional air travel to reinvent
flying through the power of electrification. In an effort to
substantially reduce the cost and environmental impact of flying
and as the operator of the largest commuter airline in the US, Surf
Air Mobility intends to develop powertrain technology with its
commercial partners to electrify existing fleets and bring
electrified aircraft to market at scale. The management team has
deep experience and expertise across aviation, electrification, and
consumer technology.
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 Company and GEM
negotiating and executing one or more definitive agreements to
fully implement the potential issuance of the mandatory convertible
debenture, and the expected terms and objectives of such
transaction. Readers of this release should be aware of the
speculative nature of forward-looking statements. These statements
are based on the beliefs of the Company’s management as well as
assumptions made by and information currently available to the
Company and reflect the Company’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: the risk that
the Company may not successfully negotiate the definitive
agreements; the risk that the Company may not consummate the
issuance of the debenture; the risk that any projections, including
earnings, revenues, expenses, synergies, margins or any other
financial items that form the basis for management’s plans and
assumptions will not be realized; the risks associated with the
Company’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 the Company files
with the SEC, and investors are urged to review those periodic
reports and the Company’s other filings with the SEC, which are
accessible on the SEC’s website at www.sec.gov, before making an
investment decision. The Company assumes no obligation to update
its forward-looking statements except as required by law.
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version on businesswire.com: https://www.businesswire.com/news/home/20231228796494/en/
Surf Air Mobility: press@surfair.com
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