Gama Aviation (GMA, Farnborough) has increased the size of its share buyback program and will now purchase all the shares tendered by shareholders. Earlier this year, the business jet, special mission, and MRO operator said it would buy back up to 27% of the company's issued share capital. However, a London Stock Exchange (LSE) filing reveals it has lifted that cap, and it may consider de-listing.
The decision follows the company's two top shareholders, founder and CEO Marwan Khalek and Bermiesco Holdings Limited, undertaking not to participate in the buyback. Khalek owns 14,179,607 shares, or 22.14% of the total issued share capital, while Bermiesco Holdings owns 12,145,726 shares, representing 19.0%. Combined, the two shareholders own 41.4% of Gama Aviation. The company says their decision not to participate frees up capital and allows it to lift the previous plan to limit the buyback to 17.5 million shares at GBP0.95 pounds (USD1.20) each.
The buyback follows the sale of the company's US MRO business, Gama Aviation (Eng) Inc., trading as Jet East, to West Star Aviation Enterprises late last year. The transaction realised net proceeds of approximately USD100 million. The buyback offer, first announced in January 2024, gives shareholders the "opportunity to review their investment in the Group," whilst also ensured the company retained sufficient capital to meet its working capital and growth requirements.
While Khalek and Bermiesco will sit the buyback out, Hutchison Capital Holdings Limited, the owner of 18,954,520 shares (or 29.6% of the issued share capital), has told Gama that it will sell its entire stake. The three shareholders own 70.7% of the company.
"The total cost to the company of the increased tender offer will depend on the level of tenders by shareholders," the filing reads. "However, if all shareholders other than Marwan Khalek and Bermesico Holdings Limited (as well as options holders) were to elect to tender all their shares then the total cost is expected to be approximately GBP37.6 million pounds (USD47.7 million). This will be funded from the cash balances of the company."
Depending on the takeup of the buyback offer by smaller shareholders, Khalek's stake in Gama Aviation may increase up to 53.9%, and Bermiesco's stake may grow to 46.1%
"In view of the likely significant increase in shareholder concentration coupled with the likely reduction in stock market liquidity in the company's shares, that may result from the tender offer, the board believes that a de-listing will be in the best interest of the company," the filing adds. "However, the board is evaluating whether this should be a matter for the current shareholders or the shareholders remaining following the tender offer to determine."
Gama Aviation's business jet fleet includes one B737-700(BBJ), a Challenger 604, a 605, and 650, a Citation Mustang, a Falcon 7X, a G280, and a Global Express among others. It operates from bases in Bournemouth, Glasgow International, Aberdeen Dyce, and Jersey.
