California Pacific hires Stephens for capital raising

Washington DC
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Start-up California Pacific Airlines has hired Stephens as financial adviser for a possible fund raising that could total more than $100 million.

The Little Rock, Arkansas-based investment bank will advise the nascent airline on a private placement of either equity or debt securities or facilities, according to a regulatory filing.

Carlsbad, California-based California Pacific will pay Stephens a one-time closing fee of $750,000 and 6% of gross proceeds up to and including $100 million or 4% of proceeds exceeding $100 million, according to the filing.

The airline plans to launch flights before the end of the year, according to local reports. It originally intended to begin operations in 2010.

California Pacific plans flights between Palomar airport in north San Diego county and Las Vegas, Oakland, Phoenix, Sacramento and San Jose. Future destinations include Cabo San Lucas and Puerto Vallarta, Mexico.

The carrier has leased one Embraer 170LR from ECC Leasing and is negotiating terms for a second aircraft from the lessor. It plans to operate up to 10 of the type by 2015.

California Pacific received US Department of Transportation certification in August 2011 but is still waiting on US Federal Aviation Administration certification.

The airline did not respond to questions before press time.