Sun Country Aims to Raise $240M in IPO
Sun Country Airlines, which unveiled plans to go public a month ago, on Monday said it’s selling more than 9 million shares in its initial public offering (IPO).
The Twin Cities-based air carrier will sell the shares for $21 to $23 a pop. In an amended filing with the Securities and Exchange Commission, Sun Country said it will give investors a 30-day window period to buy up to 1.3 million additional shares. If investors decide to purchase those extra shares, Sun Country could raise as much as $240 million in the offering, the company said in the filing.
When Sun Country first submitted plans to go public last month, the company anticipated raising about $100 million. It’s not uncommon for share prices to fluctuate ahead of an IPO.
The company hasn’t yet set a date for the IPO.
What does Sun Country have in mind for the money raised? A chunk will go toward paying off federal coronavirus relief loans. Since the pandemic hit, the carrier has received more than $107 million in relief funding, including $45 million in loans through the CARES Act, Congress’s big coronavirus relief legislation last year.
“Sun Country Airlines intends to use a portion of the net proceeds from the offering to repay in full all amounts outstanding under the CARES Act Loan and to pay fees and expenses in connection with the offering,” the company said in a statement. “The remainder of the net proceeds will be used for general corporate purposes.”
In its prospectus filing with the SEC, Sun Country said it plans to add between three to five new aircraft this year. The company currently operates 43 aircraft; 31 are dedicated to passenger service and 12 are for cargo flights. By 2023, Sun Country aims to increase its fleet to 50 total aircraft, according to the filing.
SCA Horus Holdings LLC, an affiliate of New York-based investment firm Apollo Global Management Inc., still has a majority stake in Sun Country. Before the public offering, SCA held 97 percent of the company’s common stock, according to the filing. Apollo acquired Sun Country in 2017.
“Following the completion of this offering and related transactions, [SCA] will continue to own a majority of the voting power of our outstanding common stock,” Sun Country said in the filing.
The company plans to list on the Nasdaq Global Select Market.
IPOs are relatively rare in the airline industry; Arizona-based carrier Mesa Air Group was the last airline to go public in 2018, trade publication Airline Weekly reported. Before that, Virgin America was the last major airline to file for an IPO in 2014.