CAE gets $105 million in long-term financing for aviation training
19 July 2007
CAE, the Canadian manufacturer of flight simulators that is to be a partner in both the Indira Gandhi Rashtriya Udaan Akademi (UGRUA) at Rae Bareli, UP, and in the new flight school to be set up at Gondia in Maharashtra, has announced it has secured $105 million in long-term, non-recourse financing in support of the expansion of its training centres in Burgess Hill, UK, and Morristown, New Jersey.
CAE's Vice President, Finance and Chief Financial Officer Alain Raquepas said that the company's ability to raise non-recourse financing secured by specific training assets and cash flow was a testament to the credibility of its civil training and services business. He said this agreement would enable CAE to obtain long-term financing for its growth initiatives in aviation training.
The financing is in seven-year and 11-year tranches. US-based institutional investors subscribed to a private placement for 60 percent of the total financing, while Export Development Canada (EDC) underwrote the remaining 40 per cent through a loan facility. SG Americas Securities LLC acted as financial advisor and EDC acted as lead arranger to CAE.
CAE's Burgess Hill training centre houses eight simulator bays, which will be expanded to 12 by the end of this year. These include Airbus A320, A340-600 and Boeing B747-400 full-flight simulators for commercial aviation training. It also offers Falcon 900EX EASy and Falcon 2000EX EASy business jet training programmes, as well as for the new Falcon 7X, for which CAE is the exclusive training provider. CAE's business aviation training centre in New Jersey offers training on five simulators — Dassault Falcon 7X, Falcon 900EX EASy, Falcon 2000EX EASy, Gulfstream IV, and Sikorsky S-76 — which will be expanded to twelve simulator bays, to meet increased demand.
With annual revenues of over C$1 billion, CAE operates in 19 countries, and has sold nearly 700 simulators and training devices to airlines, aircraft manufacturers, training centres and defence forces for air and ground purposes in more than 40 countries. It has over 110 full-flight simulators in more than 20 aviation training centres, serving approximately 3,500 airlines, aircraft operators and manufacturers across the globe.