Western Global Airlines reaches bankruptcy financing deal
01 / 08 / 2023
Florida-headquartered Western Global Airlines (WGA) has reached a bankruptcy financing deal that will enable the cargo carrier to continue operating while it addresses its financial position.
According to a Bloomberg report published on July 31, the carrier has lined up US$77.3m of bankruptcy financing at a rate of 9% over the Secured Overnight Financing Rate to fund the company’s operations while in Chapter 11 protection, and is expected to seek court protection from creditors in the coming days.
Chief executive Jim Neff bought up the outstanding loans held by WGA’s senior secured lenders on June 29 in order to keep the company trading through restructuring.
A statement from WGA on July 19 said: “After 10 years of profitable operations and successful growth, the Company is currently navigating financial challenges driven by unforeseen industry-wide factors, including the conflict in the Ukraine, the weakened global economy and particularly air cargo demand, spiralling costs, and the recurrence of Covid-19 pandemic in China, which disproportionately impacted WGA and its customers. Notably, up until the end of 2022, WGA delivered profitable operating results every year since its founding in 2013.”
In June reports emerged that the company was in talks with creditors and considering bankruptcy as it faced a liquidity shortage.