Summary
FTAI Aviation Ltd. (FTAI) has entered into a material definitive agreement through its subsidiary, FTAI Infrastructure LLC, to sell $300 million in securities to entities affiliated with Ares Management LLC. This transaction is a crucial component of FTAI Infrastructure's planned spin-off and rebranding to "FTAI Infrastructure Inc.". The securities include Series A Senior Preferred Stock with a 14.0% annual dividend rate, Series I warrants exercisable at $10.00 per share, and Series II warrants exercisable at $0.01 per share. The closing of this subscription is contingent upon the successful completion of the spin-off and the issuance of a substantial amount of FTAI Infrastructure's senior secured notes.
Key Highlights
- 1FTAI Infrastructure is raising $300 million through a subscription agreement with Ares Management-affiliated entities.
- 2The transaction includes the sale of Series A Senior Preferred Stock, Series I warrants, and Series II warrants.
- 3The Series A Preferred Stock carries a 14.0% annual dividend rate, with potential increases under certain conditions, and accrues dividends before mandatory cash payment after two years.
- 4Warrants include Series I (exercise price $10.00) and Series II (exercise price $0.01), each for over 3.3 million shares of common stock.
- 5Closing of the subscription is contingent on the completion of FTAI Infrastructure's spin-off and rebranding to "FTAI Infrastructure Inc.".
- 6FTAI Infrastructure is also required to issue between $450 million and $500 million in senior secured notes prior to or concurrently with the spin-off.
- 7A commitment fee of $9 million is payable if the agreement terminates, unless due to the subscriber's material breach.
Frequently Asked Questions
This filing announces a material definitive agreement, specifically a subscription agreement where FTAI Infrastructure LLC is selling $300 million of securities to entities affiliated with Ares Management. This is a key step related to the planned spin-off of FTAI Infrastructure.
FTAI Infrastructure is selling 300,000 shares of Series A Senior Preferred Stock (14.0% annual dividend rate, accrues before mandatory cash payment after two years), Series I warrants (to purchase common stock at $10.00/share), and Series II warrants (to purchase common stock at $0.01/share). The total purchase price is $300 million.
The closing is conditioned upon the consummation of the spin-off of FTAI Infrastructure (which will be renamed FTAI Infrastructure Inc.), the issuance of $450 million to $500 million in senior secured notes by FTAI Infrastructure, and other customary closing conditions.
If the agreement terminates before closing by August 30, 2022, FTAI Infrastructure and Transtar are jointly and severally liable to pay a $9 million commitment fee to the subscriber, unless the failure to close is due to a material breach by the subscriber.