U.S. Department of the Treasury: Southern Airways Express, "Transaction Summary"
Summary
This Treasury transaction summary describes a loan totaling $1.8 million to Southern Airways Express, LLC, a wholly owned subsidiary of Southern Airways Corp. and a passenger air carrier with approximately 458 U.S. employees in March 2020. Treasury made the loan pursuant to section 4003(b)(1) of the CARES Act, secured by aircraft, flight simulator, engines and spare parts. The loan carries interest at LIBOR plus 3.5%, matures on October 28, 2025, and was funded in full at close. Compensation, stock repurchase, dividend and employment-level restrictions apply as required by the CARES Act, and Treasury will also receive 3% payment-in-kind annual interest under section 4003(d).
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“U.S. Department of the Treasury: Southern Airways Express, ‘Transaction Summary.’”
Original at home.treasury.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/u-s-department-of-the-treasury-southern-airways-express-transaction-su-81755a3b08/
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Transaction Summary The U.S. Department of the Treasury agreed to make a loan totaling $1.8 million to Southern Airways Express, LLC (the Company), a wholly owned subsidiary of Southern Airways Corp. The Company is a passenger air carrier with approximately 458 U.S. employees in March 2020. Treasury made the loan pursuant to section 4003(b)(1) of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The loan is secured by aircraft, flight simulator, engines, and spare parts. The loan has an interest rate equal to LIBOR plus 3.5% and matures on October 28, 2025. Treasury funded the full loan amount at close. The loan proceeds will be used to provide liquidity to continue the Company’s operations. The transaction agreement includes covenants by the Company to comply with certain restrictions on employee compensation, stock repurchases, dividends, and reductions in employment levels, as required by the CARES Act. The loan constitutes senior indebtedness of the Company, and Treasury will also receive 3% payment-in- kind annual interest on the loan in accordance with section 4003(d) of the CARES Act.
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