Airborne connectivity provider Gogo plans to reduce its long-term debt by making a $100 million principal payment tomorrow. The Term Loan B prepayment will lower Gogo’s debt to $612.3 million and strengthen its financial foundation.
The transaction will reduce the company’s cash interest by approximately $4.5 million this year and $8.5 million on an annualized basis. There are no prepayment penalties associated with this transaction. As of April 28, Gogo had approximately $188 million in cash on hand and an undrawn revolver of $100 million.
“As we execute on our strategy and deliver significant free cash flow growth in line with our long-term guidance,” said company chairman and CEO Oakleigh Thorne, “Gogo will continue to pursue a balanced capital allocation strategy focused on maintaining adequate liquidity, investing in strategic initiatives such as Gogo 5G and our low-earth-orbit-satellite-based global broadband product, maintaining an amount of leverage appropriate for the economic environment.”