Zetta Jet lessor agrees to provide $8.5 million loan, sponsor plan

By Caroline Salls

Pittsburgh, Nov. 17 – Zetta Jet USA, Inc. existing lessor Scout Aviation II, LLC committed to provide up to $8.5 million in post-bankruptcy financing that will enable Zetta Jet to satisfy customary obligations associated with the daily operations of its business, according to a news release.

Zetta Jet said the financing will specifically allow it to pay for aircraft usage, fuel, post-bankruptcy goods and services, employee wages and other obligations.

“With the help of my advisers, the management team and I have been working on a business plan to restore the company to profitability,” Zetta Jet Chapter 11 trustee Jonathan King said in the release.

“We have already begun restructuring our aircraft fleet to operate more efficiently and otherwise reduce redundant costs.

“Now with funding in place, the company will have financial resources to implement that plan and sufficient liquidity to fund the company through a competitive sale process culminating in emergence under a plan of reorganization.

“Through this process, we hope to preserve and harvest the going concern value of Zetta Jet to maximize recoveries for the company’s stakeholders.”

Under the financing term sheet, Scout Aviation will sponsor Zetta Jet’s restructuring plan, acting as a stalking horse bidder.

As required under Chapter 11, Zetta Jet will establish a sale process, which will be subject to approval by the U.S. Bankruptcy Court for the Central District of California, and it intends to file a motion seeking approval of bidding procedures shortly.

Zetta Jet said it hopes to emerge from Chapter 11 in February.

The company is seeking interim access to up to $4.5 million of the financing.

Interest will accrue at a rate of 12%.

The post-bankruptcy financing will mature on the earliest of the closing of a sale of substantially all of Zetta Jet’s assets, the effective date of a confirmed Chapter 11 plan, the occurrence of an event of default and Feb. 28.

A hearing is scheduled for Nov. 28.

Zetta Jet is a Burbank, Calif.-based private aviation charter company. The company filed for bankruptcy on Sept. 15 under Chapter 11 case number 17-21386.

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