Western Global Airlines exits Chapter 11

BY Fraser Tennant   

Having struggled under a heavy debt load and weak market conditions, US cargo airline Western Global Airlines has exited the Chapter 11 bankruptcy process following the completion of a comprehensive financial restructuring plan.

Under the plan, the carrier has reduced its debt by more than $460m and infused significant new capital into the company, while preserving its workforce and long-term relationships with customers and suppliers.

The company, which operates chartered cargo jets for the US military and other customers, filed for Chapter 11 in August 2023, stating that it would restructure with the help of $77m in financing from creditors.

Over the course of 100 days, the company restructured its debt through an in-court process while continuing to operate without disruption. The restructuring included a cash award retention programme for nearly its entire workforce that drew upon $77.5m of debtor in possession (DIP) financing provided by its owners, Jim and Sunny Neff.

The owners also funded equity and exit financing, and waived nearly $100m of secured and unsecured prepetition debt held by them in order to provide recovery to all creditors.

"My top priority has always been to preserve the long-term viability of our company and protect our people,” said Jim Neff, founder and chief executive of Western Global Airlines. “I am pleased our restructuring process has achieved that. It continues to be a privilege to lead our team, especially as Western Global Airlines has emerged stronger and ready to thrive again as it has historically done.”

Headquartered in Estero, Florida, in only 10 years Western Global Airlines has become a leading, global logistics powerhouse, safely and reliably flying to over 400 airports in 135 countries on six continents on behalf of its diverse, blue chip client base in the logistics industry.

“As always, I am immensely grateful to our employees, customers and partners for their enduring support as we navigated the Chapter 11 process,” concluded Mr Neff. “I look forward to sharing the company's successes with our loyal employees and to continue to serve as a critical partner for our customers.”

News: US's Western Global Airlines exits Chapter 11

Roche to acquire obesity drug developer Carmot

BY Richard Summerfield

In a deal that will significantly boost its anti-obesity pipeline, Swiss pharmaceutical giant Roche has agreed to acquire Carmot Therapeutics. Under the terms of the deal, Carmot’s equity holders will receive $2.7bn in cash, and a further $400m if certain milestones are met.

The transaction, which is expected to close in the first quarter of 2024, will provide Roche with access to Carmot’s current research and development portfolio, including all clinical and preclinical assets. Carmot’s most promising obesity drug candidate, a once-weekly injection called CT-388, belongs to a class known as dual GLP-1/GIP receptor agonists and mimics a hormone typically released into the body after eating. Following encouraging phase one trial results, the Carmot drug is ready to be tested on humans in the second of three trial stages, with a possible market launch in the 2030s.

“Obesity is a heterogeneous disease, which contributes to many other diseases that together comprise a significant health burden worldwide,” said Thomas Schinecker, chief executive of Roche Group. “By combining Carmot’s portfolio with programs in our Pharmaceuticals pipeline and our Diagnostics expertise and portfolio of products across cardiovascular and metabolic diseases, we are aiming to improve the standard of care and positively impact patients’ lives.”

“We are encouraged by the clinical data for the lead asset CT-388, which demonstrated substantial weight loss in Phase 1b,” said Levi Garraway, chief medical officer and head of global product development at Roche. “These data suggest the potential for a differentiated profile to treat obesity and its associated diseases. The broad Carmot portfolio offers different routes of administration and opportunities to develop combination therapies that treat obesity and potentially other indications.”

“We are proud of the pipeline that we have built in obesity and diabetes and the strong data we have generated to date,” said Heather Turner, chief executive of Carmot. “With distinct routes of administration and the potential for combinations, we feel Carmot’s pipeline has the potential to meet patients where they are in their metabolic journey and have a significant impact on patients’ lives. We are confident that Roche will enable robust development of our programs and help us achieve our goal of delivering life-changing therapeutics for people living with metabolic and potentially other diseases.”

The announcement comes just over a month after Roche agreed to acquire Telavant from Roivant Sciences and Pfizer for an initial $7.1bn, granting the company the rights to an experimental treatment for inflammatory bowel disease.

News: Roche joins race for obesity drugs with $2.7 billion Carmot deal

KKR to acquire remaining stake in Global Atlantic for $2.7bn

BY Richard Summerfield

Private equity giant KKR & Co. has agreed to pay around $2.7bn to acquire the remaining 37 percent stake it does not own in insurance company Global Atlantic Financial Group.

The deal, which will see KKR’s ownership of the company increase to 100 percent, will be fully funded by its existing balance sheet, which had $23bn of cash and investments as of 30 September 2023. Upon closing, Global Atlantic will continue to be led by its management team and operate under the Global Atlantic brand.

KKR has served as Global Atlantic’s asset manager since 2021, offering access to its global investment and origination capabilities. According to the firm, Global Atlantic’s assets under management have grown significantly, up from $72bn in 2020 to $158bn today.

Under the terms of the deal, which is expected to close in the first quarter of 2024, KKR will pay Global Atlantic’s minority shareholders an amount in cash equal to Global Atlantic’s book value, with certain adjustments.

“The strategic partnership we envisioned three years ago has exceeded our expectations,” said Joe Bae and Scott Nuttall, co-chief executives of KKR. “It has been transformative for both businesses and a great cultural fit that has enabled us to contribute to Global Atlantic’s continued strong performance and success, while also being a key driver of growth for KKR. We expect the new ownership structure will foster even closer collaboration, allowing us to fully leverage our complementary strengths and grow faster together.”

“We are taking this step because we have demonstrated, over the last three years, that we are stronger together,” said Allan Levine, chief executive of Global Atlantic. “Being part of KKR has strengthened our position as a leading insurance company and enhanced our ability to deliver compelling solutions for our clients. Moving from a diverse group of shareholders to a single one with KKR clarifies our objectives and allows us to think – and invest – longer term.

“Although we hope to unlock further value by taking this step in our capital structure, neither our client-first approach nor our investment and risk management framework will change, and the day-to-day experience of our clients and colleagues will feel very much the same as it does today,” he added.

News: KKR to buy remaining stake in insurer Global Atlantic for $2.7 billion

Global fraud rocketed in H1 2023, reveals new report

BY Fraser Tennant

Despite efforts to thwart scammers through regulation and government action, fraud levels are continuing to increase across the globe and rocketed in H1 2023, according to a new report by NICE Actimize.

In its ‘Delving Deeper: 2023 Fraud Insights Second Edition’, the financial crime solutions provider reveals that FIs are under mounting pressure due to the surge in fraud attacks, rising transaction volumes, and the ever-evolving landscape of regulatory and consumer liability requirements.

The report’s key findings include: (i) total payment volume is up 22 percent when compared to H1 2022; (ii) the value of these payments and fraud value has increased by 18 percent; (iii) the attempted fraud rate for international payments increased 31 percent in H1 2023; and (iv) for international transactions, 60 percent of the fraud was conducted using money mules rather than traditional peer-to-peer (P2P) methods

According to the report, the rise in fraud and scams can be traced back to the increase of real-time payments, which are quick and easy ways for scammers to find their victims. Also adding to the pressure on FIs is the April 2024 liability shift deadline for compliance with new, mandatory regulatory rules.

“FIs should not wait until April 2024 to act,” said Chad Hetherington, vice president and head of product at NICE Actimize. “With the rise in real-time payments creating new opportunities for scammers, FIs and banks must act now to catch criminals quicker.

“The speed, ease, and varieties of scams gaining traction shows fraudsters are investing in new and perfecting existing scams,” he continued. “These issues all signal the immediate need for FIs to take action to adopt next generation technology to fend off the threats of tomorrow.”

The report also notes that the scale of fraud attacks along with new mandatory regulatory requirements has forced FIs to expand fraud prevention into other areas for improvement. These include changes in regulation, with fraud liability shifts top of mind, especially in the space of scams and authorised push payment (APP) fraud.

Mr Hetherington concluded: “As cooperation grows within the financial services industry, collective intelligence and innovation will be vital so FIs can protect both their organisations and customers.” 

Report: Delving Deeper: 2023 Fraud Insights Second Edition

Capital Power acquires US gas power plants in $1.1bn deal

BY Fraser Tennant

In a deal that positions it as one of the largest generators in North America, Canadian energy company Capital Power has acquired two US natural gas-fired generation facilities – based in California and Arizona – at a cost of $1.1bn.

Capital is aiming to increase its power generation through greenhouse gas emissions-free renewables as well as more stable, but polluting, energy sources such as natural gas.

The La Paloma natural gas-fired generation plant in Kern County, California has a capacity of 1062 MW, while the Harquahala natural gas-fired generation facility in Maricopa County, Arizona has a capacity of 1092 MW.

The acquisitions of the natural gas-fired power plants are estimated to bring an average annual adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) of approximately $265m for the 2024-28 period.

“These plants are well positioned to bolster our current portfolio,” said Avik Dey, president and chief executive of Capital Power. “They align with our commitment to providing reliable, affordable power solutions that support a balanced approach to the energy transition through offering reliable generation while we grow our own renewables fleet.”

Following completion of the transaction, Capital will rise from ninth position to become the fifth largest non-regulated gas-powered generator in North America. The company plans to achieve net-zero emissions by 2045.

“We are pleased with how this strategic investment fully aligns with our financial objectives,” said Sandra Haskins, senior vice president finance and chief financial officer of Capital Power. “The acquisitions offer an attractive entry point in the Western Electricity Coordinating Council (WECC) market, are immediately accretive and maintains our investment grade credit ratings and balance sheet strength.”

The two acquisitions are each expected to close in the first quarter of 2024, subject to the receipt of regulatory approvals and the satisfaction of other customary closing conditions.

Mr Dey concluded: “This transaction underscores our dedication to delivering long-term value to our shareholders and advancing our position as a leader in the power generation sector.”

News: Capital Power acquires two natgas-fired power plants in U.S. for $1.1 bln