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Canada Jetlines Ltd. announce that it has entered into a letter of intent (LOI) with a Korean special purpose fund led and established by InHarv Partners Ltd. for a financing of up to $14 million.
InHarv is a hybrid of venture capital and private equity based in Seoul, South Korea, whose strategic stance is to raise capital in South Korea for investment in cutting-edge start-ups overseas. InHarv will be acting as lead and general partner for the Korean special purpose fund, and also investing as principal.
The Korean special purpose fund includes the investment divisions of a number of leading Korean manufacturing and financial institutions as its group of limited partners. A special purpose vehicle (SPV Fund) will be created by InHarv to facilitate the investment into Jetlines.
“This financing transaction with the Korean SPV Fund is an important pillar of Jetlines’ financing plan,” said Mark Morabito, executive chairman of Jetlines. “Combined with the SmartLynx financing completed at the end of 2018 and $8.8 million in proceeds received through the exercise of previously issued share purchase warrants, Jetlines has raised a significant portion of the funds that it needs to launch airline operations. We intend to raise the balance of the proceeds through additional debt and equity financings in the near term and negotiations are well advanced in this regard.”
Javier Suarez, CEO of Jetlines, added: “There is significant penetration of ULCC [ultra-low-cost] airlines in South Korea. They understand the value proposition associated with these types of airlines and the returns Korean local investors have obtained investing in these airlines. The extensive due diligence that the Korean SVP Fund have conducted to date provides further validation of the need for a true ULCC in Canada and Jetlines’ business plan.”
The founder and chairman of InHarv is Jong Chang. Chang was previously lead partner of Booz Allen Hamilton, a global general management consultancy in the U.S., and a senior vice-president and founding member of KBRI (now Moody’s Korea Inc.), the first credit rating agency in Seoul.
Chang used to be one of the economic council members for the president of South Korea. He also held positions as an independent board member of LG Chemical Co. of the LG Group based in Seoul and as an independent board member of Saint-Gabain Korea, a leading flat glass maker.
Presently, Chang is the chairman of the board of ToolGen, Inc., a leading DNA editing company based in Seoul, and a board director of Verseau Therapeutics Inc., a leading macrophage company based in Lexington, Mass., and of Chromis Optical Fiber Company based in Warren, N.J.
Jetlines also announced the appointment of Jyri Strandman as a special operations advisor, effective immediately. Strandman holds over 30 years of airline experience, most recently as chief operating officer of Go Airlines. During his time with GoAir, Strandman was responsible for strengthening flight operations, engineering, airport services, security and airside operations (ASA), flight safety, inflight services and integrated operations control center.
Strandman held progressively senior positions with U.S. ultra-low-cost carriers (ULCC), Spirit Airlines from 2010 to 2017, from director, Flight Training and Standards to most recently director of operations and vice-president of Flight Operations. During his tenure, Spirit grew the Airbus fleet by 76 aircraft, adding three different A320 variants, maintained the flight operations and fuel budgets, and oversaw the regulatory and operational control of the airline.
Prior to his role with Spirit Airlines, Strandman held the role of manager, Flight Operations Training with Virgin America from 2008 to 2010 where he built the team to redesign all pilot training programs to a higher training standard, at a lower total cost. Strandman is a qualified captain on the Airbus A320 family of aircraft, as well as four other aircraft, with over 12,400 hours of flight experience.
Lastly, Jetlines announced the departure of chief operating officer, Michael Bata.
CEO Suarez commented: “Jetlines would like to thank Michael for his time in helping the company advance towards commercial operations. We wish Michael the best in his future endeavours.”