Surf Air Mobility Inc. (SAM) - the parent of Surf Air (URF, Santa Monica) - may raise more than USD200 million through a direct public listing on the New York Stock Exchange on July 11, 2023, according to a filing with the US Securities and Exchange Commission (SEC). Unlike an Initial Public Offering (IPO), a direct listing requires no newly-issued shares and no involvement of underwriters.
According to an SEC disclosure, SAM will offer up to 18.8 million shares, citing a share price of between USD5.93 and USD11.86 per share as a price at which SAM shares changed hands in private transactions earlier this year.
The direct listing will run under the symbol "SRFM". Without a traditional underwritten IPO, the direct listing is "a novel method for commencing public trading in shares, and consequently, the trading volume and price per share may be more volatile than if shares are listed in connection with an underwritten IPO", the company said.
The public listing will follow a primary offering of common stock to be distributed to Surf Air and Southern Airways Express (9X, Memphis International) shareholders in connection with an internal reorganisation and the acquisition of the airline.
As reported, Southern and its consolidated subsidiaries will become a wholly-owned subsidiary of SAM immediately before the public listing.
Following the acquisition and internal reorganisation, SAM directors, executive officers, and 5% stockholders and their respective affiliates will own about 21.3% of the stock. Southern shareholders will have the right to receive SAM's common stock equal to USD81.25 million or 12.5% of the fully-diluted shares of the common stock upon listing. Surf Air will remain a wholly-owned subsidiary of SAM, with the parent owning directly or indirectly all of the equity securities, assets, business and operations of each of Surf Air and Southern.
According to an amended registration statement filed with the SEC on June 30, SAM common stock totalled 114,385,350 shares. "The registration of up to 38,135,330 shares of our common stock to be issued or reserved for issuance pursuant to the internal reorganisation and the Southern acquisition, based on the assumed opening price, to be distributed to Surf Air shareholders and Southern stockholders, plus an additional 76,250,000 shares of our common stock to be distributed to Southern stockholders if the opening price per share of our common stock on the day of listing were to be USD1.00".
The Southern acquisition is to result in a combined regional airline network servicing US cities across the mid-Atlantic, Gulf South, US Midwest, Rocky Mountains, West Coast, New England, and Hawaii.
For the three months ending March 31, 2023, Surf Air generated USD5.5 million in revenue and Southern USD22.7 million in revenue, an increase of 14.3% and 35.6%, respectively, compared to the same period in 2022.
Surf Air and Southern are expected to provide the basis for SAM's expanded, nationwide, regional air mobility platform. The company intends to electrify its existing fleet with hybrid-electric and fully-electric powertrain technology once it is fully designed, developed, and certified by the Federal Aviation Administration (FAA) as part of issuing the Supplemental Type Certificate (STC). FAA approval of the first hybrid-electric and fully-electric Cessna (single turboprop) 208B Grand Caravan EX STCs is expected by the end of 2025, followed by the commercialisation of the technology.