/NOT FOR DISTRIBUTION TO US NEWS WIRE SERVICES
OR DISSEMINATION IN THE UNITED
STATES/
MISSISSAUGA, ON, Feb. 1, 2021 /CNW/ - Cargojet Inc. ("Cargojet" or
the "Company") (TSX: CJT) is pleased to announce that it has closed
its previously announced offering of 1,642,000 common voting shares
("Common Voting Shares") and/or variable voting shares ("Variable
Voting Shares" and, together with the Common Voting Shares, the
"Shares") of Cargojet at a price of C$213.25 per Share (the "Offering Price") for
aggregate gross proceeds to Cargojet of C$350,156,500 (the "Offering"). The Offering was
made pursuant to a final short form prospectus dated January 25, 2021 (the "Prospectus").
The Company intends to apply the net proceeds of the Offering to
fund the following strategic priorities:
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(a)
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Expand Domestic
Capacity and Facilities. The COVID-19 pandemic has generally
increased demand for Cargojet's domestic air cargo services due to
the dramatic increase in e-commerce activity. The Company intends
to use a portion of the net proceeds of the Offering, along with
cash on hand and drawings on its revolving credit facility, to fund
growth capital expenditures and acquisition of five B767 freighter
aircraft for re-delivery in 2021/2022 (with the last delivery in
2023) (approximately $200.0 million), as well as investments in a
new hanger and additional land-based facility infrastructure in
Canada. The infrastructure investments will support additional
ecommerce volumes, driven by the ongoing pandemic, that are
expected to establish a new higher baseline going
forward.
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(b)
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Pursue U.S. and
International Growth Strategy. The COVID-19 pandemic has
significantly increased demand for Cargojet's international air
cargo services. Air cargo capacity has been severely constrained
due to the reduction of passenger aircraft operating on
international routes and it is uncertain when such capacity will
return to pre-pandemic levels. Furthermore, U.S. and international
air cargo growth opportunities have emerged as a result of rapidly
evolving global supply chains and a lack of air cargo capacity in
key markets. The Company intends to use a portion of the net
proceeds of the Offering, along with cash on hand and drawings on
its revolving credit facility, to capitalize on potential strategic
investments in the U.S. and the acquisition of two long-range B-777
freighter aircraft for international routes for re-delivery in late
2023 and the first half of 2024. The Company estimates the cost of
each B-777 freighter aircraft to be approximately $75.0
million.
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(c)
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Repay Indebtedness.
The Company intends to use a portion of the net proceeds of the
Offering to discharge aircraft financing leases, including
associated balloon payments, for six aircraft maturing in the next
twelve months (approximately $89.3 million) and retire the
outstanding balance under its credit facility ($98.9 million as of
the date hereof, including letters of credit), which is primarily
used to finance the working capital requirements and capital
expenditures of the Company.
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The Shares were offered by Scotiabank, CIBC Capital Markets, RBC
Capital Markets, J.P. Morgan Securities Canada Inc., Morgan Stanley
Canada Limited and BMO Capital Markets acting as co-leads and joint
bookrunners, on behalf of a syndicate of underwriters
(collectively, the "Underwriters"). The Company has granted to the
Underwriters an over-allotment option, exercisable in whole or in
part, at any time until 30 days following the closing of the
Offering, to purchase up to an additional 246,300 Shares at the
Offering Price, on the same terms and conditions as the
Offering.
This news release shall not constitute an offer to sell or the
solicitation of an offer to buy securities in the United States, nor shall there be any sale
of the securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful. The securities issued
pursuant to the Offering have not been, and will not be registered
under the U.S. Securities Act of 1933, as amended (the "U.S.
Securities Act") or under any U.S. state securities laws, and may
not be offered or sold in the United
States or to, or for the account or benefit of, U.S.
persons, absent registration or an applicable exemption from the
registration requirements of the U.S. Securities Act and applicable
state securities laws.
About Cargojet
Cargojet is Canada's leading
provider of time sensitive premium air cargo services to all major
cities across North America,
providing Dedicated ACMI and International Charter services and
carries over 25,000,000 pounds of cargo weekly. Cargojet operates
its network with its own fleet of 27 Cargo aircraft.
Notice on Forward-Looking Statements:
Certain statements contained herein, including statements
related to use of net proceeds of the Offering, constitute
"forward-looking statements". Forward-looking statements look into
the future and provide an opinion as to the effect of certain
events and trends on the business. Forward looking statements may
include words such as "plans", "intends", "anticipates", "should",
"estimates", "expects", "believes", "indicates", "targeting",
"suggests" and similar expressions. These forward-looking
statements are based on current expectations and entail various
risks and uncertainties. Reference should be made to the issuer's
public filings available at www.sedar.com and at www.cargojet.com,
including its most recent Annual Information Form filed with the
Canadian securities regulators, its most recent Consolidated
Financial Statements and Notes thereto and related Management's
Discussion and Analysis (MD&A), and the final short form
prospectus filed in connection with the Offering, for a summary of
material risks. These risks are not intended to represent a
complete list of the risks that could affect the issuer; however,
these risks should be considered carefully. Actual results may
materially differ from expectations, if known and unknown risks or
uncertainties affect our business, or if our estimates or
assumptions prove inaccurate. The forward-looking statements
contained herein describe the issuer's expectations at the date of
this news release and, accordingly, are subject to change after
such date. The issuer assumes no obligation to update or revise any
forward-looking statement, whether as a result of new information,
future events or any other reason, other than as required by
applicable securities laws. In the event the issuer does update any
forward-looking statement, no inference should be made that the
issuer will make additional updates with respect to that statement,
related matters, or any other forward-looking statement. Readers
are cautioned not to place undue reliance on these forward-looking
statements.
SOURCE Cargojet Inc.