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Cargojet Announces Closing of C$350 Million Bought Deal Equity Offering

MISSISSAUGA, ON, February 1, 2021 /CNW/ - Cargojet Inc. ("Cargojet" or the "Company") (TSX: CJT) is pleased to announce that it has closed its previously announced offering of 1,642,000 common voting shares (“Common Voting Shares”) and/or variable voting shares (“Variable Voting Shares” and, together with the Common Voting Shares, the “Shares”) of Cargojet at a price of C$213.25 per Share (the “Offering Price”) for aggregate gross proceeds to Cargojet of C$350,156,500 (the “Offering”). The Offering was made pursuant to a final short form prospectus dated January 25, 2021 (the “Prospectus”).

The Company intends to apply the net proceeds of the Offering to fund the following strategic priorities:

(a) Expand Domestic Capacity and Facilities. The COVID-19 pandemic has generally increased demand for Cargojet’s domestic air cargo services due to the dramatic increase in e-commerce activity. The Company intends to use a portion of the net proceeds of the Offering, along with cash on hand and drawings on its revolving credit facility, to fund growth capital expenditures and acquisition of five B767 freighter aircraft for re-delivery in 2021/2022 (with the last delivery in 2023) (approximately $200.0 million), as well as investments in a new hanger and additional landbased facility infrastructure in Canada. The infrastructure investments will support additional ecommerce volumes, driven by the ongoing pandemic, that are expected to establish a new higher baseline going forward.

(b) Pursue U.S. and International Growth Strategy. The COVID-19 pandemic has significantly increased demand for Cargojet’s international air cargo services. Air cargo capacity has been severely constrained due to the reduction of passenger aircraft operating on international routes and it is uncertain when such capacity will return to pre-pandemic levels. Furthermore, U.S. and international air cargo growth opportunities have emerged as a result of rapidly evolving global supply chains and a lack of air cargo capacity in key markets. The Company intends to use a portion of the net proceeds of the Offering, along with cash on hand and drawings on its revolving credit facility, to capitalize on potential strategic investments in the U.S. and the acquisition of two long-range B-777 freighter aircraft for international routes for re-delivery in late 2023 and the first half of 2024. The Company estimates the cost of each B-777 freighter aircraft to be approximately $75.0 million.

(c) Repay Indebtedness. The Company intends to use a portion of the net proceeds of the Offering to discharge aircraft financing leases, including associated balloon payments, for six aircraft maturing in the next twelve months (approximately $89.3 million) and retire the outstanding balance under its credit facility ($98.9 million as of the date hereof, including letters of credit), which is primarily used to finance the working capital requirements and capital expenditures of the Company.

The Shares were offered by Scotiabank, CIBC Capital Markets, RBC Capital Markets, J.P. Morgan Securities Canada Inc., Morgan Stanley Canada Limited and BMO Capital Markets acting as co-leads and joint bookrunners, on behalf of a syndicate of underwriters (collectively, the “Underwriters”). The Company has granted to the Underwriters an over-allotment option, exercisable in whole or in part, at any time until 30 days following the closing of the Offering, to purchase up to an additional 246,300 Shares at the Offering Price, on the same terms and conditions as the Offering. - 2 - This news release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities issued pursuant to the Offering have not been, and will not be registered under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”) or under any U.S. state securities laws, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons, absent registration or an applicable exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws.

About Cargojet

Cargojet is Canada’s leading provider of time sensitive premium air cargo services to all major cities across North America, providing Dedicated ACMI and International Charter services and carries over 25,000,000 pounds of cargo weekly. Cargojet operates its network with its own fleet of 27 Cargo aircraft.

For further information, please contact:

Pauline Dhillon
Chief Corporate Officer
Tel: (905) 501 7373

Notice on Forward-Looking Statements:
Certain statements contained herein, including statements related to the completion of the Offering and use of net proceeds of the Offering, constitute “forward-looking statements”. Forward-looking statements look into the future and provide an opinion as to the effect of certain events and trends on the business. Forward-looking statements may include words such as “plans”, “intends”, “anticipates”, “should”, “estimates”, “expects”, “believes”, “indicates”, “targeting”, “suggests” and similar expressions. These forward-looking statements are based on current expectations and entail various risks and uncertainties. Reference should be made to the issuer’s public filings available at and at, including its most recent Annual Information Form filed with the Canadian securities regulators, its most recent Consolidated Financial Statements and Notes thereto and related Management’s Discussion and Analysis (MD&A), and the short form prospectus to be filed in connection with the Offering, for a summary of material risks. These risks are not intended to represent a complete list of the risks that could affect the issuer; however, these risks should be considered carefully. Actual results may materially differ from expectations, if known and unknown risks or uncertainties affect our business, or if our estimates or assumptions prove inaccurate. The forward-looking statements contained herein describe the issuer’s expectations at the date of this news release and, accordingly, are subject to change after such date. The issuer assumes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or any other reason, other than as required by applicable securities laws. In the event the issuer does update any forward-looking statement, no inference should be made that the issuer will make additional updates with respect to that statement, related matters, or any other forward-looking statement. Readers are cautioned not to place undue reliance on these forward-looking statements.