The Fort Lauderdale-based air cargo carrier has received court authorization to sell about a 66% interest in the company to H.I.G. Capital, a Miami-based private equity and venture capital investment firm that represents investors such as Banque Nationale de Paris; Deutsche Banc Alex. Brown; Donaldson, Lufkin & Jenrette; and First Union Corp.
The air carrier announced in late August it filed for protection from creditors. As for the reason, the air carrier cited in part the loss earlier in the year of an aircraft-charter contract with Emery Worldwide, which in turn lost a U.S. Postal Service cargo contract to Federal Express. That action idled nearly half of Amerijet's fleet of about a dozen Boeing 727 aircraft.
In a subsequent bankruptcy schedule, the air cargo carrier claimed about $76 million in assets and $69 million in liabilities. "The dollar value of the assets is probably lower in light of the depressed market for 727s," says Michael D. Seese, an attorney in the Miami law firm of Kluger, Peretz, Kaplan & Berlin who filed the petition for the air carrier.
Under terms of the divestiture plan, the air cargo carrier agreed to sell the 29,242-sf main office it occupies at 2800 S. Andrews Ave. in Fort Lauderdale for $2 million, or about $68.39 per sf. The carrier acquired the building in December 1999 for $2.2 million, according to Broward County property records.
"Although H.I.G. is acquiring the real estate, they'll be leasing it back to the debtor," Seese tells GlobeSt.com. "Even though our EBITDA will decrease as a result as the lease payments, the debtor gains more benefits from the cash received from the sale of the real estate as compared to the loss of borrowing ability from the decreased EBITDA."
What the agreement does not address, however, is the air carrier's leasehold interest in 182,915 sf of industrial warehouse space at 3401 NW 72nd Ave. in the airport/west submarket in Miami-Dade County. The company, which did not respond to a request from GlobeSt.com for comment, leases that 11.2-acre site from AMB Property Limited Partnership, a party listed as a creditor in the court records.
"I'm not at liberty to disclose that other than to say the debtor currently has all its rights pursuant Section 365 of the Bankruptcy Code regarding assumption and rejection of leases," Seese says.
Since it is still operating within the so-called exclusivity period, Seese says, court rules prohibit the air carrier from shopping for a better deal. The rules prevent creditors from filing alternative reorganization plans during that time period.
"Under the Bankruptcy Code, the debtor has exclusive rights to file a plan of reorganization during the first 120 days of the filing," Seese says. "That is commonly referred to as the exclusivity period. The basis for approving the no-shop provision, in part, was the fact that the debtor is still operating within the exclusivity period."
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