Regourd Aviation #4

Presentation of the company

Created in 1977, Regourd Aviation is active in the air transportation sector in French-speaking Africa. The company, managed by Alain Regourd, has 181 employees and is based in Paris. The company provides its fleet (14 aircrafts), crews and pilots to its locally based subsidiaries: EquaFlight and EquaJet in Congo Brazzaville, Equa2C in Cameroon, Equa2R in the Democratic Republic of Congo and Ivoire Executive in Ivory Coast. In addition, the group takes charge of the maintenance of its aircraft through its authorized subsidiary, Airmain.

The company’s main activities are:

• EquaFlight and EquaJet in Congo Brazzaville
• Equa2C in Cameroon
• Equa2R in the Democratic Republic of Congo
• Ivoire Executive in Ivory Coast

The company works with airlines (Air France, Chalair Aviation), mining and oil companies (Total, Chevron Corporation, SARIS Congo) and government agencies.

In terms of organization, each subsidiary has local bank accounts in CFA francs and, in parallel, accounts in euros in France. The CFA franc currency has been linked to the euro since 1999, which eliminates any exchange risk.

Project Description

The company wishes to borrow 2 060 000 € over 18 months with 6 months of deferred repayment to finance the purchase of an helicopter within the framework of a charter contract signed with Air France . This project will be realised this quarter.

As a reminder, the Lendix lending community supported Regourd Aviation in 2016 and 2017 with 1 600 000 € and 1 000 000 € to finance development of its European charter business

This project is a Flexible Bridge Loan, an amortizable loan with a standard commitment for the first 9 months and the possibility of early repayment at no cost for the remainder of the loan term, even in the event of refinancing by other financial institutions.

This project is a medium-term loan with a capital amortisation deferment and as such presents a different method of capital repayment than standard projects. The first 6 months, the lenders will only receive interest; the following 12 months, the lenders will receive interest and principal amortization. This principal repayment profile matches the borrower’s financing needs while allowing lenders to earn a higher amount of interest."

Analyst’s Opinion

The borrower is a holding company whose revenues are derived from services invoiced to its subsidiaries. The financial analysis was carried-out on consolidated financial statements, which reflect the group’s performance.

With a turnover of 42 593 000 € in 2017 and an experienced team, the group has a good track record combined with a two-digits operating margin.

In 2016, the decrease of turnover and profitability is linked to the restructuring plan with withdrawal from Congo and the development of European charters. In 2017, increase of turnover is linked to the success of the development of European activity which now represents a significat part of the turnover. The forecast is based on the performance 2017

The group has a correct repayment capacity with a forecast FCCR (Fixed Charge Cover Ratio *) at 1,07 and an excellent financial structure, with a forecast net debt / ebitda ratio of 0,75 and a net debt / shareholder equity of 50%.

The analysis of the project leads to a credit rating of B and a 4,50% annual interest rate.

Strong points:

• Good historical performance based on diversified client base.
• Correct repayment ability with a forecasted FCCR of 1,07 reinforced by the support of banking pool and shareholders.
• 35 years of track record in private aviation

Point of vigilence:

• High exposure to French speaking Africa area.

*The multiple of FCCR at 1,07 means that the company has a safety margin of 7% relative to its ability to repay its credit maturities.

The expert opinion is given as an indication on the basis of the elements provided by the project holder and information from our databases (Scores & Decisions, Corporate Banking File). This opinion is only an element of reflection in the decision making of a lender to participate in the financing of a project.