Fractional ownership provider Avantair has restructured some of its financing arrangements and raised $2.8 million in new capital through the issuance of senior secured convertible notes as the company makes strides toward its goal of reaching profitability next year.
The financing restructuring and new capital come as the Clearwater, Fla., company continues to regain its footing after grounding its fleet for several weeks in late October and early November.
Avantair began returning its Piaggio Avanti aircraft to service in November following comprehensive inspections. The company also implemented a series of new maintenance record-keeping and operational procedures, began working on several new safety programs and retained the services of some key formerofficials.
During the company’s recent quarterly results call, President Stephen Wagman outlined as series of cost-cutting and other actions the company was taking to improve its financial standing. These include “strategically eliminating more costly aircraft” from the fleet, plans to sell its California fixed-base operation by year’s end and increasing its maintenance outsourcing.
Wagman, who said the company hoped to reach positive earnings next year, also detailed plans to raise up to $5 million in capital this quarter through a proposed securities offer and expects to have similar offerings early next year.
Avantair took a step toward that goal with the closing of $2.8 million in senior secured convertible notes, which are convertible into shares of common stock. Members of the company’s board of directors led the financing effort.
Meanwhile, the company also worked with its lender Midsouth Services to reduce its monthly lease payments by more than $1.8 million over the next 15 months. The reduced lease payments were among several restructuring efforts that Avantair undertook with its lender. Other changes included extending the maturities on two aircraft and amending a warrant agreement.
“We believe that this new round of financing will allow us to continue making progress on our flight operations and customer service initiatives,” Avantair CEO Steven Santo says.