CargoJet signs long-term agreement with DHL to provide global air-transportation services

Cargojet Boeing 767-300 freighter

Cargojet has entered into a new long-term strategic agreement with DHL Network Operations (USA), an affiliate of Deutsche Post DHL Group, for a term of five years with a renewal option for an additional two years, to provide air-transportation services for DHL’s global network.

The agreement is expected to be meaningfully accretive to Cargojet’s earnings and cash flows over time and help Cargojet further diversify its portfolio of services in line with its previously announced strategic goal of achieving a balanced portfolio.

Under the agreement, Cargojet will provide ACMI, CMI, charter and aircraft dry lease services to DHL to support DHL’s international requirements for Europe and North, South, Central and Latin America, as well as Asia. Cargojet utilises 12 freighters to service DHL’s current requirements. DHL intends to add five additional B-767 freighters during the 2022-23 timeframe to fulfill DHL’s anticipated network requirements. Additionally, DHL intends to be Cargojet’s inaugural launch customer for the state-of-the-art B-777 wide-body long-range cargo aircraft, which are expected to be deployed in late 2023 or early 2024.

In addition, to align interests and strengthen the long-term strategic relationship, Cargojet will issue warrants to DHL to acquire up to 9.5% of Cargojet’s outstanding voting shares (on a non-diluted basis as of the date hereof) at a price of CA$158.92 per share (based on the 20-day volume weighted average trading price immediately prior to the date hereof) over a period of seven years, with vesting tied to the delivery by DHL of up to CA$2.3 billion in business volume during the same term. (US$1.00 = CA$1.25 at time of publication)

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