Regourd Aviation #5

Presentation of the company

Created in 1977, Regourd Aviation Group is active in the air transport sector in Europe and 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 and Regourd Avitation in Europe. In addition, the group takes charge of the maintenance of its aircraft through its authorized subsidiary, Airmain.

The company’s main activities are:

• Charter of VIP in Frecnh speaking Africa with EquaFlight and EquaJet in Congo Brazzaville
• Charter and regular flights in Europe developped by Regourd Aviation in Paris

The company works with the private sector but also with public VIPs.

In terms of African 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. Over the past three years, the strategy is to develop a European activtity which represens now more than 60 % of turnover and profitability of the group. 

Project Description

In the frame of the strategy to develop its activity in Europe, the company requests a loan of 888 000 € over 18 months with 6 months of deferred repayment to finance the down payment on the acquisition of a Embraer 145LR to be delivered in October 2019. The balance will be financed by the group’s banking pool. This project will be realised next month.

As a reminder, the October lending community supported Regourd Aviation since 2016. There remains our loan of 2017 for 1Mio€ to finance the group’s commercial development in the Europe region and then of 2018 for 2.060K€ to finance the purchase of a helicopter.

This project is a Flexible Bridge Loan, an amortizable loan with a standard commitment for the first 6 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.

The amount offered on the platform is limited to 435 120€, which is in line with the regulatory limits.

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 significant part of the turnover. In 2018, the group forecasts a turnover of 43,858,000 euros and a profitability in the same range as 2017. The forecast is based on the performance 2019 and new contracts already signed with Europen airlines.

The group has a correct repayment capacity with a forecast FCCR (Fixed Charge Cover Ratio *) at 1,11 and an excellent financial structure, with a forecast net debt / ebitda ratio of 1,2 and a net debt / shareholder equity of 84%.

The analysis of the project leads to a credit rating of B and a 4,5% annual interest rate.

*The multiple of FCCR at 1,11 means that the company has a safety margin of 11% 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 (External data provider). This opinion is only an element of reflection in the decision making of a lender to participate in the financing of a project.

Strong points:

• Good historical performance based on diversified client base.
• Correct repayment ability with a forecasted FCCR of 1,11 reinforced by the support of banking pool.
• Successful development of the European activity lowering their expsoure on Africa.

Point of vigilence:

• Significant exposure to French speaking Africa area.