Surf Air (URF, Santa Monica) parent Surf Air Mobility Inc. has announced the closure of a previously announced deal with investment firm GEM Global Yield LLC for a mandatory convertible security valued at USD35.2 million, to be changed into a maximum of 8,000,000 shares of Surf Air's common stock.

Additionally, GEM has agreed to reinstate Surf Air Mobility's access to draw down up to USD400 million under their subscription facility, with USD100 million available for advance drawdowns and USD300 million for regular drawdowns.

In a statement, Surf Air Mobility said the deal aims to:

  • cancel a significant portion of GEM’s freely tradeable shares in the company;
  • limit GEM's daily share sales to 10% of the previous day’s trading volume; and
  • allow Surf Air Mobility to redeem the security in cash at 115% of its par value, potentially avoiding dilution.

Surf Air Mobility - which develops electric and hybrid powertrains - also announced a one-for-seven reverse stock split, effective August 19, 2024, for all outstanding shares of the company's common stock. The split has been approved by stockholders and the board. The reverse split will consolidate every seven existing shares into one new share, adjusting stockholder positions and equity awards accordingly. Fractional shares will be compensated with cash.

The company said the reverse split is intended to maintain compliance with the minimum bid price requirements for its listing on the New York Stock Exchange (NYSE). Surf Air Mobility's common stock will continue to trade under the symbol "SRFM" and is expected to begin trading on the NYSE on a split-adjusted basis on August 19. Immediately following the reverse split, there will be 12,826,529 shares of common stock outstanding, the company added.

Surf Air Mobility previously announced its direct public listing on the NYSE in July 2023. Immediately before this, it acquired Southern Airways Express (9X, Memphis International) and its consolidated subsidiaries. The merger was aimed at boosting Surf Air's regional air mobility platform across the US. Surf Air Mobility plans to retrofit Southern's fleet with hybrid-electric and fully electric powertrains, once these technologies are approved by the FAA. The first FAA certifications for hybrid-electric and fully-electric Cessna (single turboprop) 208B Grand Caravans are anticipated by late 2025, after which the technology will be commercialised.