Gama Aviation, a prominent UK-based business jet, special mission, and MRO operator, has announced an expansion of its share buyback program, now committing to purchase all shares tendered by shareholders. This decision, detailed in a recent London Stock Exchange filing, marks a significant shift from the initial plan to buy back only up to 27% of the company’s issued share capital. The company is also contemplating a potential delisting from the exchange.
This change in strategy follows the decision by the company’s two major shareholders, founder and CEO Marwan Khalek and Bermiesco Holdings Limited, not to participate in the buyback. Khalek holds 14,179,607 shares, approximately 22.14% of the issued share capital, while Bermiesco Holdings owns 12,145,726 shares, or 19%. The non-participation of these shareholders, who together own 41.4% of Gama Aviation, has allowed the company to remove the initial cap of buying back 17.5 million shares at GBP0.95 each.
The decision to expand the buyback program follows the sale of Gama Aviation’s US MRO business to West Star Aviation Enterprises, which netted approximately USD100 million in proceeds. Introduced in January 2024, the buyback offer aims to provide shareholders with an opportunity to reevaluate their investments while ensuring the company maintains sufficient capital for operational needs and growth.
Hutchison Capital Holdings Limited, another major shareholder with 18,954,520 shares (29.6% of the issued share capital), has indicated its intention to sell its entire stake. With the potential changes in share ownership, CEO Marwan Khalek’s stake could increase to 53.9%, and Bermiesco’s to 46.1%, depending on the uptake of the buyback offer by other shareholders.
The company noted that the total cost of the expanded tender offer will depend on the level of shareholder participation and could reach approximately GBP37.6 million (USD47.7 million), to be funded from the company’s cash reserves.
Gama Aviation’s board is considering the implications of increased shareholder concentration and reduced market liquidity that might result from the tender offer, suggesting that delisting could be in the company’s best interest. However, the board is still evaluating whether this decision should be left to the current shareholders or those remaining after the buyback.
Gama Aviation operates a diverse fleet that includes models such as the B737-700(BBJ), Challenger series, Citation Mustang, Falcon 7X, G280, and Global Express, with operational bases in Bournemouth, Glasgow International, Aberdeen Dyce, and Jersey. The developments in its share buyback program and potential delisting will likely have significant implications for the company’s strategic direction and shareholder structure.
