Porter Aviation Holdings, parent of Porter Airlines, is to launch a C$120 million ($118.5 million) initial public offering (IPO) on the Toronto Stock Exchange shortly.
Porter finished road shows with investors last week and has hired RBC Dominion Securities as the lead manager and sole bookrunner of the offering.
RBC Dominion Securities National Bank Financial, BMO Nesbitt Burns, CIBC World Markets, TD Securities, GMP Securities, Credit Suisse Securities (Canada), Raymond James and Versant Partners are the underwriters of the offering.
If the over-allotment option is exercised in full the IPO could raise up to C$138 million, according to the final prospectus filed on 21 May 2010.
The company says it intends to use part of the proceeds to repay in full its C$10.0 million non-revolving term loan (approximately C$10.7 million). In October 2009, the company obtained the loan secured by unencumbered assets, including aircraft rotables and ground equipment. The facility matures in 2011 but according to the prospectus, the lender requires Porter, within five business days of any sale or issuance of any debt or equity. As of 20 May 2010, the C$10.0 million was outstanding.
Porter will also use C$11.0 million of the net proceeds to fund completion of the new terminal at Billy Bishop Toronto City Centre Airport (BBTCA).
The carrier says it also intends to use the balance of the net proceeds from the offering for other general corporate purposes, which may include potential acquisitions of aircraft.
Porter began operations in October 2006 with two Bombardier Q400 aircraft and currently operates a 20-aircraft fleet.
The carrier intends to acquire another seven aircraft over the next 12 months. Porter, says in the prospectus, that it has signed a purchase commitment for C$1.7 million and paid C$170,000 deposit to an aircraft supplier for additional equipment to be delivered later this year.
Porter reported a $5.97 million net loss on revenues of C$49 million for the first quarter of fiscal 2010. In 2009, it posted a C$4.6 million net loss on revenues of C$151.2 million.
At 31 March 2010, cash amounted to $9.125 million compared with $20.91 million at the end of 2009 and $41.44 million at 31 March 2009.
As at 31 March 2010, long-term debt was C$321.8 million, compared with C$322.7 million at the end of last year and $131.8 million as at 31 December 2008. This year the carrier has C$13.23 million principal repayments scheduled while in 2011 principal repayments totals C$29.54 million.