Ansett Aviation Training

333 Capital acted as exclusive financial advisor in the sale and recapitalisation of the Ansett Aviation Training Group, positioning the business to respond to the significant challenges imposed on the aviation industry by the COVID pandemic.

Background

Ansett Aviation Training (‘AAT’) is a global independent provider of aircraft simulator training solutions. Throughout 2020, AAT faced significant trading and liquidity challenges due to the impact of the COVID-19 pandemic on the Group’s performance. Furthermore, AAT’s capital structure was significantly over-levered and comprised of seven lenders, across four different security pools which made it no longer fit for purpose and highly restrictive.

How we helped

The significant trading and capital structure challenges led the shareholders of ATT to engage 333 Capital to effect a fulsome solvent recapitalisation of the business which would achieve:

• a stable balance sheet to see the business through the uncertain medium term COVID-19 recovery period;
• a simplified capital structure allowing free movement of cash throughout the business;
• the ability to keep all operating entities together as part of the broader Group to maintain efficiencies gained through operational linkages; and
• access to sufficient capital to allow Management to undertake required maintenance capex, pursue attractive investment opportunities as they arise and adapt to changing market conditions in the future.

333 Capital developed and coordinated a sophisticated process where two alternative options were pursued:

1. Capital raising: Raising new debt and equity to deliver and recapitalise the balance sheet.
2. Sale process: Run a competitive sale process from which the proceeds could be used to refinance existing financiers.

This ultimately involved 333 Capital managing a complex process that required the alignment of a range of workstreams and stakeholders including:

• Negotiating maturity extensions, covenant waivers and standstills with the seven existing lenders to provide a runway to pursue a fulsome recapitalisation process.
• Preparing the business ahead of the process to optimise any new investment for existing owners and stakeholders. This included preparing sales documents and a corporate financial model.
• Engaging with a range of potential investors including domestic and global private equity and credit funds, investment banks and trade players.
• Facilitating an efficient due diligence process with a range of investors, including managing a fulsome data room and Q&A process.
• Commercially agreeing compromised settlements with four of the existing financiers and securing improved terms for the new owners in respect of one existing financier who will continue in the new structure. 
• Negotiating a comprehensive suite of transaction documents including a share purchase agreement and refinancing documentation with existing lenders.
• Assisting AAT navigate regulatory processes including a public ACCC review process and FIRB.

Result

333 Capital negotiated a sale of 100% of the shares of AAT to a Consortium of investors including Bain Capital Credit, Arcadia Capital and Bridger Aerospace which effected a fulsome recapitalisation of the business. The transaction provided the business with ~$110m in new funding which allowed the business to refinance the majority of its existing debt and roll forward an existing lender into the new structure on more favourable terms.

David Garside, AAT CEO, described the transaction as “a significant milestone for our company and an important next step in our ongoing response to the challenges of the pandemic” and believes it will position the AAT Group “to prosper long-term.”