Western Global Airlines Reaches Agreement on Consensual Reorganization with Key Financial Stakeholders

Continuing to operate without interruption and meeting customer needs with safe, effective, on-time service delivery

WGA's founder to reinvest again in business alongside bondholders and other financial parties

Enters process with $77.3 million of committed DIP financing

ESTERO, Fla., Aug. 7, 2023 /PRNewswire/ -- Western Global Airlines ("WGA" or the "Company"), a US FAA 121 cargo airline, today announced that the Company has reached an agreement with key financial stakeholders, including existing bondholders holding more than 85% of the outstanding senior unsecured notes due in 2025 (the "Ad Hoc Group"), in support of a reorganization plan to stabilize the business and its financial future, with WGA's founder, Jim Neff, reinvesting alongside bondholders and other financial partners. This agreement ensures that WGA continues to operate without interruption and meets customer needs with safe, effective, on-time service delivery. To implement the plan, WGA has filed for voluntary protection under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. The Company enters the process with a commitment for more than $77 million of debtor-in possession ("DIP") financing from Jim Neff and certain members of the Ad Hoc Group (the "Plan Investors") that will support the Company's operations through the Chapter 11 cases and provide WGA with a strong balance sheet after it has emerged to even better serve its customers.

The agreement reached with the Ad Hoc Group is memorialized in a Restructuring Support Agreement ("RSA") that includes the terms of a Chapter 11 plan of reorganization. Once the reorganization is implemented, it will materially reduce the Company's debt by over $450 million, infuse significant new capital into the Company, and give the reorganized WGA the ability to continue its commitment to sharing the economic benefits of ownership with employees. The RSA achieves many of the goals WGA sought from the outset of its restructuring efforts, including deleveraging the balance sheet by 86% and partnering with new investors. Moreover, WGA's proposed partnership with the Plan Investors and the Ad Hoc Group is indicative of its strong and promising future. Additionally, it is the parties' intention to provide consideration to the Employee Stock Ownership Plan (ESOP). 

WGA will continue to operate as usual and provide reliable and safe service to its customers throughout the reorganization process and going forward. The Company, the Founder, the Plan Investors, and the Ad Hoc Group are focused on moving through this process expeditiously and thoughtfully to the benefit of employees, customers, and other stakeholders.

This follows a substantial investment by Jim Neff on June 29, 2023, wherein he purchased the Company's $115 million of outstanding senior secured debt for $45 million in a competitive process independently conducted by the lenders?a transaction that immediately improved the Company's lending conditions. To further support the restructuring process under the terms of the proposed plan described in the RSA, Jim Neff has also agreed to forego some of the statutory rights that he would otherwise maintain as the holder of this debt and pass on the $70 million benefit to the other stakeholders, including the bondholders, the employees, and the ESOP, to provide greater consideration and value to them.

"As the Founder and CEO of Western Global Airlines, I have always understood the unique value proposition that WGA brings to the world as a reliable, responsive, and low-cost international air cargo provider," said Jim Neff. "I am?and always will be?loyal to WGA and its employee team. As such, my number one priority is preserving the long-term viability and value of WGA and protecting our employees. All my objectives regarding the Company align with this overriding goal. The plan we have outlined in the RSA reflects my continued dedication to and belief in WGA, along with the overwhelming support of our key financial stakeholders. I am confident that this plan will tremendously strengthen our financial position and ensure a better future for WGA, our people, and our customers. As always, we have the utmost gratitude to our employees, loyal customer base, and industry partners for their enduring support and appreciate the continued collaboration with our largest financial stakeholders."

WGA has filed certain "first day" motions within the U.S. Bankruptcy Court that, upon approval, will support ordinary-course operations including, but not limited to, continuing employee compensation and benefits programs, honoring customer commitments, and fulfilling go-forward obligations to vendors. Such motions are typical in the Chapter 11 process, and WGA expects that they will be approved within the first few days of the case.

For more information about Western Global Airlines' Chapter 11 case, please visit https://cases.stretto.com/WGA or call our hotline at 844.500.8484 (for toll-free U.S. and Canada calls) or 949.522.9797 (for tolled international calls).

The Company is supported by Weil, Gotshal & Manges LLP and Richards, Layton & Finger as legal counsel, Evercore as investment banker, FTI Consulting as restructuring advisor, and Seabury as commercial advisor. The Ad Hoc Group is advised by Paul, Weiss, Rifkind, Wharton & Garrison LLP and Landis Rath & Cobb LLP as legal counsel and Ducera Partners LLC as investment banker.

About WGA

Headquartered in Estero, Florida, with an MRO in Shreveport, Louisiana, Western Global Airlines provides contracted air cargo transportation services ranging from ACMI (Aircraft, Crew, Maintenance, and Insurance) to Full Service, on a global scale. We are your premier 21^st century, high-tech air cargo platform serving customers in e-commerce, express, freight forwarding, logistics, nonprofit, and governmental organizations. In only 10 years, Western Global has become a leading, global logistics powerhouse, safely and reliably flying to over 400 cities in 135 countries on six continents on behalf of its diverse, blue chip, client base in the logistics industry.

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SOURCE Western Global Airlines