flyExclusive Secures $25 Million Investment to Expand and Upgrade Fleet
FlyExclusive, a prominent US business jet operator, has struck a pivotal $25 million securities purchase agreement with EnTrust Global and its managing entity, EG Sponsor LLC. This agreement marks a significant infusion of capital into flyExclusive, enabling it to pursue ambitious growth and service enhancement strategies.
Under the terms of the agreement, the investment vehicle will acquire 25,510 shares of Series B convertible preferred stock, priced at $1,000 per share. FlyExclusive CEO Jim Segrave emphasized the importance of this partnership, noting, “This equity investment represents a significant milestone in our strategic plan to upgrade and increase the size of our fleet. The investors have been exceptional partners, and their commitment to flyExclusive will allow us to execute our vertical integration strategy and deliver a best-in-class experience for our customers.”
As part of the deal’s initial phase, flyExclusive issued 20,408 shares of the preferred stock along with a warrant allowing the purchase of up to 4 million shares of the company’s Class A common stock. This initial transaction netted the company approximately $20.4 million in gross proceeds. The company is set to issue an additional 5,102 shares of Series B stock and a warrant for up to 1 million Class A shares to EG Sponsor by August 15, 2024, which will bring in another $5.1 million.
This financial move comes at a crucial time as flyExclusive reported a significant operational loss of $27.4 million in the first quarter of 2024, a 226% increase from the previous year’s first-quarter loss. This loss occurred despite a 3.8% year-over-year increase in revenue, reaching $79.9 million. The losses were attributed to escalated costs in operations, sales, and administration. As of March 31, 2024, flyExclusive held $5.34 million in cash and cash equivalents, approximately half of the amount from the same date in 2023. The new funding from EnTrust Global and EG Sponsor is seen as a strategic move to address these liquidity challenges and stabilize the company’s finances.
FlyExclusive’s fleet includes a diverse array of aircraft such as the Bombardier Challenger 350, Citation Encores, Citation Excels, and Gulfstream GIV-SPs, totaling 93 aircraft. The company offers a range of services including on-demand charter, club memberships, and fractional ownership programs, catering to a varied clientele seeking premium air travel solutions.
This strategic financial partnership heralds a new phase of growth and operational enhancement for flyExclusive, aimed at refining its fleet capabilities and ensuring superior service delivery to its customers. The investment underscores the confidence of EnTrust Global and EG Sponsor in flyExclusive’s potential and strategic direction.
Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com