US commuter carrier Southern Airways Express (9X, Memphis International) has merged with electric aviation company Surf Air Mobility Inc. (SAM), the parent of Surf Air (URF, Santa Monica), ahead of the joint company's listing on the New York Stock Exchange, Southern chairman and chief executive officer Stan Little has confirmed to ch-aviation.
"SurfAir Mobility’s launch on the New York Stock Exchange sets in motion our business plan to electrify air travel around the world. Specifically, the merger with Southern Airways has now been consummated, the partnership with Textron Aviation (Wichita Cessna Aircraft Field) has gone into effect, and capital from multiple sources has been put in place. Now the real work can begin!” Little said.
SAM announced its direct listing on the NYSE on July 27 with an announced reference price of USD20 per share for its common stock. The Los Angeles-based electric aviation and regional air travel company hoped to raise more than USD200 million through the direct public listing - which, unlike an Initial Public Offering (IPO) - requires no newly-issued shares and no involvement of underwriters.
The merger with Southern happened immediately prior to the listing and followed the effectiveness of the registration statement, an internal reorganisation, regulatory approvals and other customary closing conditions," SAM said in a filing to the US Securities Exchange Commission (SEC).
On July 25, SAM announced that its registration statement on Forms S-1 and S-4 was declared effective by the SEC, setting in motion the internal reorganisation and the merger with Southern. Upon the effectiveness of the registration, SAGL Merger Sub Inc., a wholly-owned subsidiary of SAM, merged with Surf Air, after which Surf Air became a wholly-owned subsidiary of SAM.
This was confirmed by the company prospectus: "Immediately prior to listing, SAC Merger Sub Inc., a wholly-owned subsidiary of SAM, will be merged with and into Southern, after which Southern will be a wholly-owned subsidiary of SAM".
On the eve of the listing, SAM announced its common stock shares were issued a reference price of USD20 by the NYSE as guidance for investors "The number of shares of SAM's common stock outstanding upon listing will depend on the actual opening trading price per share on the listing date. Assuming that the opening trading price per share on the listing date equals the reference price of USD20, SAM would have approximately 49.8 million shares of common stock outstanding upon listing."
According to its prospectus, SAM has registered 114,389,794 shares of common stock at a par value of USD0.0001 per share, to be distributed to shareholders of Surf Air and Southern stockholders in connection with an internal reorganisation and the acquisition of the commuter airline.
Surf Air currently provides a regional air mobility platform with scheduled routes and on-demand charter flights operated by third parties under Part 135. It is developing electric powertrain technology starting with a hybrid-electric and a fully-electric variant of the Cessna (single turboprop) 208B Grand Caravan EX.
Southern Airways Express is considered the largest commuter airline and the largest passenger operator of Cessna Caravans in the US by scheduled departures. It serves 40 US cities and has multi-year contracts with the US government to operate Essential Air Service (EAS) routes.
"The Southern acquisition will result in a combined regional airline network servicing US cities across the Mid-Atlantic, Gulf South, Midwest, Rocky Mountains, West Coast, New England and Hawaii. Surf Air and Southern together served over 99,000 passengers across 44 cities with over 18,000 departures for the three months ending March 31, 2023," the prospectus read.
Editorial Comment: Added a comment from Stan Little. - 29Jul2023 - 19:14 UTC