Western Global Airlines Successfully Completes Financial Restructuring
Company emerges from Chapter 11 with a strong financial foundation and less than $100 million of funded debt, positioned for long-term success.
Reorganization efforts supported by all classes of voting creditors.
Better positioned to meet customer needs with continued safe, effective, reliable service.
ESTERO, Fla., Dec. 4, 2023 /PRNewswire/ -- Western Global Airlines ("WGA" or the "Company"), a US FAA 121 certified long-haul wide-body cargo airline with worldwide coverage, announced today that the Company has successfully completed its comprehensive financial restructuring. The Company's Plan of Reorganization (the "Plan") was confirmed by the U.S. Bankruptcy Court for the District of Delaware after receiving overwhelming support by all voting classes of creditors and the unanimous support of the Official Committee of Unsecured Creditors. Under the Plan, WGA has materially reduced its debt by more than $460 million and infused significant new capital into the Company, while preserving its seasoned workforce and long-term relationships with customers and suppliers.
The Company is positioned for a strong and promising future as it leverages its unique and scalable platform. WGA will benefit from a greatly enhanced balance sheet, building on its extensive ten-year experience of safely and reliably operating large wide-body freighters to more than 400 airports in 135 countries on six continents. The Company has emerged with its entire pre-petition fleet of four 747-400 and fifteen MD-11 operational freighters intact, as well as two MD-11F's that have not yet been conformed, eleven part-out aircraft, and a large inventory of parts, materials, and tooling. Further, during the Chapter 11 process, the Company completed the overhaul of seven spare CF6-80C2 engines. With the exception of one leased airplane, all aircraft, engines, and spare parts are 100% owned by the reorganized WGA.
Over the course of just 100 days, the Company restructured its debt through an in-court process. WGA continued to operate without disruption and implemented a cash award retention program for nearly its entire workforce during the process by drawing on $77.5 million of Debtor in Possession (DIP) financing provided by its owners, Jim and Sunny Neff, who also funded the equity and exit financing, and waived nearly $100 million of secured and unsecured prepetition debt held by them in order to provide recovery to all creditors. This cash consideration is a testament to the Company's effort to build consensus around its restructuring Plan, which it is proud to have achieved, and to establish a strong foundation going forward.
"As the Founder and CEO of Western Global Airlines, my top priority has always been to preserve the long-term viability of our Company and protect our people. I am pleased our restructuring process has achieved that," said Jim Neff. "It coninues to be a privilege to lead our team, especially as WGA has emerged stronger and ready to thrive again as it has historically done. As always, I am immensely grateful to our employees, customers, and partners for their enduring support as we navigated this process. I look forward to sharing the Company's successes with our loyal employees and for Western Global to continue to serve as a critical partner for our customers. We will continue our mission to connect people worldwide to the urgent necessities that are important to them—with steadfast and renewed focus and financial resources."
At the Company's confirmation hearing, Weil, Gotshal & Manges LLP Partner Candace Arthur, counsel for WGA, stated, "The debtors thank Jim and Sunny Neff for stepping up prepetition when extensive efforts failed to identify anyone else that would invest in the company to keep it out of liquidation. The debtors thank them for financing these Chapter 11 cases through a plan process despite it not being the easiest and most economic decision for them. The plan before the Court today is a gifting plan with multiple stakeholders receiving a recovery that they would, otherwise, not have. After today the debtors will also thank the owners for reinvesting with an equity check for the benefit of the reorganized company."
The presiding judge, the Honorable Karen B. Owens, further commended the parties "for working together very productively to make these cases as smooth as one could imagine," later continuing, "I very much appreciate everyone's hard work to reach consensus." Her comments followed an affirmation from the Official Committee of Unsecured Creditors, whose legal representative called the Plan "highly favorable…[with] overwhelming support of all creditor classes."
Ms. Arthur concluded the hearing by noting, "Western Global is better than it was...It is emerging stronger with significantly less debt, without…operational distractions...And it's poised to strive even in the face of an industry that continues to have significant headwinds."
For more information about Western Global Airlines' Chapter 11 case, including terms of the transactions consummated in connection with the Company's emergence, please visit https://cases.stretto.com/WGA or call the Company's hotline at 844.500.8484 (for toll-free U.S. and Canada calls) or 949.522.9797 (for tolled international calls).
The Company was represented by Weil, Gotshal & Manges LLP and Richards, Layton & Finger as legal counsel, Evercore as investment banker, and FTI Consulting as restructuring advisor.
SOURCE Western Global Airlines