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READ THE ARTICLE BELOW: WSJ Jan. 2 2 , 2 0 2 4 How One Debt - Laden Company Could Create a Storm for Private
READ THE ARTICLE BELOW: WSJ Jan. How One DebtLaden Company Could Create a Storm for Private Jets Based in Malta, privately owned VistaJet grew at breakneck speed after to become the worlds secondlargest flier of private jets. But, through complex financial engineering involving its founder and owner, Swiss entrepreneur Thomas Flohr, it also accumulated big debts that could prove unsustainable. The company offers a kind of privatejet taxi service. Investors are getting increasingly worried: A VistaJet bond issued last May, which was very oversubscribed, is now selling off. On Friday, its yield closed at the highest on record. This means a price of cents on the dollar and a spread over Treasury yields of percentage points. Disclosures related to VistaJets bond showed the companys net loss rising to $ million in compared with $ million in Its net debt increased to an eyewatering times equity, up from times a year earlier. Auditor EY warned in April that a material uncertainty exists that may cast significant doubt on the Groups ability to continue as a going concern, the Financial Times reported in May. Delta Air Lines rescued one of VistaJets peers, USbased Wheels Up from a bankruptcy that would have brought planes to the market. VistaJet is bigger. During the pandemic, VistaJet owned fleet to jets, Export Development CanadaEDC a public export credit agency, financed many of them, though VistaJet was on the hook for the money. VistaJets rapid growth was facilitated by statebacked guarantees. EDCs transactions with VistaJet amounted to at least billion Canadian dollars between and alone, official data shows. Perhaps the strategy could be made to work, but the firms deep financial losses suggest that it spent too much on big aircraft. Flohr has said he is focused on improving earnings before interest, taxes, depreciation and amortization, but this isnt the most important metric for a capitalintensive business that must pay back hefty investments. VistaJet left its highgrowth phase behind in which will have improved its finances and freed up more cash to pay lenders. But there is only so much to go around: Operating cash flow in amounted to just of the companys debts at the end of that year. Meanwhile, soaring bond yields will likely push up the cost of refinancing. Were VistaJet to sell some of its Bombardier jets to reduce debt, it would put pressure on used prices. If in the worst case, the company suddenly collapsed, the impact on the market could be nearly unprecedented. The operator has Challengersalmost as many as the for sale in the entire secondhand market, data by broker Guardian Jet shows. Its Global s hardtomove aircraft with a price tag of $ million each, would overwhelm the eight currently available. ANSWER THE QUESTION: C Can you learn from the presented data the probability of VistaJets default?
READ THE ARTICLE BELOW:
WSJ Jan. How One DebtLaden Company Could Create a Storm for Private Jets
Based in Malta, privately owned VistaJet grew at breakneck speed after to become the worlds secondlargest flier of private jets. But, through complex financial engineering involving its founder and owner, Swiss entrepreneur Thomas Flohr, it also accumulated big debts that could prove unsustainable. The company offers a kind of privatejet taxi service.
Investors are getting increasingly worried: A VistaJet bond issued last May, which was very oversubscribed, is now selling off. On Friday, its yield closed at the highest on record. This means a price of cents on the dollar and a spread over Treasury yields of percentage points.
Disclosures related to VistaJets bond showed the companys net loss rising to $ million in compared with $ million in Its net debt increased to an eyewatering times equity, up from times a year earlier. Auditor EY warned in April that a material uncertainty exists that may cast significant doubt on the Groups ability to continue as a going concern, the Financial Times reported in May.
Delta Air Lines rescued one of VistaJets peers, USbased Wheels Up from a bankruptcy that would have brought planes to the market. VistaJet is bigger. During the pandemic, VistaJet owned fleet to jets, Export Development CanadaEDC a public export credit agency, financed many of them, though VistaJet was on the hook for the money.
VistaJets rapid growth was facilitated by statebacked guarantees. EDCs transactions with VistaJet amounted to at least billion Canadian dollars between and alone, official data shows.
Perhaps the strategy could be made to work, but the firms deep financial losses suggest that it spent too much on big aircraft. Flohr has said he is focused on improving earnings before interest, taxes, depreciation and amortization, but this isnt the most important metric for a capitalintensive business that must pay back hefty investments.
VistaJet left its highgrowth phase behind in which will have improved its finances and freed up more cash to pay lenders. But there is only so much to go around: Operating cash flow in amounted to just of the companys debts at the end of that year. Meanwhile, soaring bond yields will likely push up the cost of refinancing.
Were VistaJet to sell some of its Bombardier jets to reduce debt, it would put pressure on used prices. If in the worst case, the company suddenly collapsed, the impact on the market could be nearly unprecedented.
The operator has Challengersalmost as many as the for sale in the entire secondhand market, data by broker Guardian Jet shows. Its Global s hardtomove aircraft with a price tag of $ million each, would overwhelm the eight currently available.
ANSWER THE QUESTION:
C Can you learn from the presented data the probability of VistaJets default?
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