XOJet has $2.4bn to fund overseas growth

XOJet, the executive jet company backed by TPG Inc., said it has financing agreements of as much as $2.46 billion (Dh9.03bn) to fund its North American operations and expand overseas.

Investors in this round of funding include TPG, Abu Dhabi-based closely held investment firm Tasameem Real Estate Company, Export Development Canada, White Oak Global Advisors and XOJet founder Paul Touw, XOJet said yesterday in a statement distributed by Business Wire.

XOJet also plans to create a separate joint venture with Tasameem to be based in Abu Dhabi. XOJet, based in San Carlos, California, said it will receive $964 million of the funding immediately, with the rest to be made available later this year when the joint venture with Tasameem begins.

It said $85m of the new funding would be an equity investment from TPG, Tasameem and XOJet management, with the rest coming from loans.

"For the first time, our aircraft are fully funded," XOJet's chief executive Paul Touw said in a telephone interview. "We now have an enormous balance sheet from which to grow the company, he said."

XOJet said it expects to receive about $900m in financing immediately. This includes $500m from Abu Dhabi, and $400m from Export Development Canada to fund the purchase of Challenger jets made by Bombardier Inc. The company expects Middle East investors to lend $1.5bn later this year, and expects to launch an Abu Dhabi base for international operations by year end. Touw declined to identify the investors.

Touw said about 90 percent of XOJet's 550 regular customers are in the United States but that non-US customers may account for half of fliers within three years.

He expects many new customers to come from the UAE, "one of the most dynamic, high-growth markets," and said XOJet

will eventually expand in regions including Europe, China and India.

Touw said the company has positive cash flow, and a 40 per cent greater utilisation rate than some rivals, cutting costs.

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