Jetlines Announces that SmartLynx has Agreed to Release Funds on Ticket Sales
VANCOUVER, BRITISH COLUMBIA, Canada Jetlines Ltd. (JET: TSX-V; JETMF: OTCQB) (the “Company” or “Jetlines”) is pleased to announce that SmartLynx Airlines SIA (“SmartLynx”) and Jetlines have amended the escrow release conditions associated with the $7.5 million subscription receipt financing that was completed in December 2018 (the “SmartLynx Offering”). The escrow release conditions have been amended to match the funding conditions that are subject to the pending financing with the Korean special purpose fund led and established by InHarv Partners Ltd. (“InHarv”) (see press release of March 28, 2019 for further details). The amended escrow release conditions will provide funds to Jetlines at an earlier date than previously agreed.
Under the amended terms with SmartLynx, the gross proceeds of the SmartLynx Offering will be released after Jetlines achieves certain milestones as described below. $5.25 million (70%) of the proceeds shall be released upon the Company raising additional funds (the “Funding Milestone”) from a subsequent financing by June 30, 2019 (such completion date subject to waiver by SmartLynx). The Funding Milestone will be calculated by adding the amount of $3.85 million realized through the exercise of previously issued warrants since November 1, 2018 and the final amount committed under the InHarv financing at closing, and subtracting that total number from $40 million. In addition, the Company will be required to receive from the Canada Transportation Agency an order allowing it to sell tickets for airline travel. Jetlines intends to apply for this order in time to receive it in September 2019, approximately three months ahead of first flight.
The remaining $2.25 million (30%) of the proceeds shall be released upon the receipt by Jetlines Operations of its air operator certificate from Transport Canada.
Executive Chairman, Mark Morabito stated, “I would like to thank the SmartLynx group for their continued support of Jetlines. This amendment follows on their recent agreement to lease two Airbus A320 aircraft to Jetlines in order to allow for its planned December 17, 2019 start-up date. These amended escrow release terms will provide significant additional operational flexibility as funds will be available at an earlier date prior to start of operations and will allow Jetlines to better manage its capital. The terms will also be consistent with the funding conditions associated with the InHarv financing and together will provide the additional certainty of funding to the remaining investors that Jetlines is targeting to complete the remaining financing to launch airline operations.”
For further details on the SmartLynx Offering, please refer to the press release dated December 27, 2018.
About SmartLynx Airlines SIA
SmartLynx Airlines was founded in 1992 as a private airline. Today it is the leading ACMI (Aircraft-Crew-Maintenance-Insurance) provider in the EU on Airbus aircrafts. As an EU airline, SmartLynx Airlines complies with IOSA and EASA international quality standards, and has access to free route airspace. In 2019, SmartLynx’s fleet will consist of 20 Airbus aircrafts, flying routes in Europe and Asia. SmartLynx flight crew members represent more than 17 nationalities, speak multiple languages. The average experience of SmartLynx’s captains exceeds 5300 block hours and first officers exceeds 1900 block hours.
For more information on SmartLynx, please visit their website at www.smartlynx.aero
About Canada Jetlines Ltd.
Canada Jetlines is set to become Canada’s first true Ultra-Low Cost Carrier (ULCC) airline, with plans to operate flights across Canada and provide non-stop service from Canada to the United States, Mexico and the Caribbean. The Company plans to commence operations with the Airbus A320 fleet, the most widely used aircraft for ultra-low cost carriers worldwide. Jetlines is led by a board and management team with extensive experience and expertise in low-cost airlines, start-ups and capital markets. The Company was granted an unprecedented exemption from the Government of Canada that will permit it to conduct domestic air services while having up to 49% foreign voting interests.
For more information on Jetlines, please visit our website at www.jetlines.ca.
ON BEHALF OF THE BOARD
"Mark J. Morabito"
Canada Jetlines is part of the King & Bay group of companies. King & Bay is a merchant bank that specializes in identifying, funding, developing and supporting growth opportunities in the resource, aviation, and technology sectors.
For more information, please contact:
Toll Free: 1-833-226-5387
Cautionary Note Regarding Forward-Looking Information
This news release contains "forward-looking information" concerning anticipated developments and events that may occur in the future. Forward-looking information contained in this news release includes, but is not limited to, statements with respect to (i) the commencement of operations and the success of expected future operations of the Company; (ii) the satisfaction of the escrow release conditions; (iii) the receipt of an order from the Canada Transportation Agency to permit ticket sales, (iv) the completion of the financing with InHarv; (v) the lease of aircraft from SmartLynx; and (vi) the Company’s launch timeline.
In certain cases, forward-looking information can be identified by the use of words such as "plans", "expects", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved" suggesting future outcomes, or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. Forward-looking information contained in this news release is based on certain factors and assumptions regarding, among other things, the satisfaction of the conditions to closing of the Offering, the satisfaction of the escrow release conditions, the terms contained in the executed agreements to be entered into by the Company or its subsidiaries with SmartLynx, the receipt of financing to commence airline operations, the accuracy, reliability and success of the Jetlines’ business model; the timely receipt of governmental approvals; the timely commencement of operations by Jetlines and the success of such operations; the legislative and regulatory environments of the jurisdictions where the Jetlines will carry on business or have operations; the impact of competition and the competitive response to the Jetlines’ business strategy; and the availability of aircraft. While the Company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.
Forward-looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Such factors include risks related to, the ability to obtain financing at acceptable terms, the impact of general economic conditions, domestic and international airline industry conditions, future relations with SmartLynx, volatility of fuel prices, increases in operating costs, terrorism, pandemics, natural disasters, currency fluctuations, interest rates, risks specific to the airline industry, the ability of management to implement Jetlines’ operational strategy, the ability to attract qualified management and staff, labour disputes, regulatory risks, including risks relating to the acquisition of the necessary licenses and permits; risks related to disputes under the agreement with Boeing to acquire 737-Max aircraft, and the additional risks identified in the "Risk Factors" section of the Company's reports and filings with applicable Canadian securities regulators. There is no assurance that the closing of the Offering will occur or if it does occur that the escrow release conditions will be satisfied or that SmartLynx will exercise the Option.
Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. Accordingly, readers should not place undue reliance on forward-looking information. The forward-looking information is made as of the date of this news release. Except as required by applicable securities laws, the Company does not undertake any obligation to publicly update or revise any forward-looking information.Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) has reviewed or accepts responsibility for the adequacy or accuracy of this release.