Gogo refinances debt
April 23, 2021
By Chris Forrester
In-Flight business aviation communications specialists Gogo has refinanced its borrowings.
The new borrowings (Term Loan B) will reduce its overall leverage, enhance the company’s liquidity and deliver about $70 million in annual interest payments.
Gogo has taken a $725 million 7-year loan along with a 5-year $100 million revolving credit line. As of April 20th, 2021, Gogo had $464 million cash on hand most of which came from the sale last year of its commercial aviation division to Intelsat.
Gogo says it intends to use the proceeds of the Term Loan B and cash on hand to redeem in full the $975 million aggregate principal outstanding of its Senior Secured Notes due 2024 (the ‘Senior Secured Notes’). “The new 5-year $100 million Revolver, which will replace Gogo’s existing asset based revolving credit facility, will provide additional liquidity. In addition to reducing overall leverage, Gogo expects to realise approximately $70 million in annual interest expense savings as a result of the Facilities. The closing of the Facilities, which is expected to occur in late April, is subject to execution of definitive documentation.”
“In early 2020, Gogo outlined our value-creation roadmap focused on three key priorities: managing our business through the severe impact of the Covid-19 pandemic on the travel industry, completing the sale of the Commercial Aviation business, and executing a comprehensive refinancing to enhance our financial flexibility and position Gogo for growth,” said Oakleigh Thorne, Gogo’s Chairman/CEO. “With today’s announcement, we have delivered on that plan, and are well-positioned to build on our enhanced financial profile and strong market position to drive long-term shareholder value.”