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MarketScreener Homepage  >  Equities  >  Toronto Stock Exchange  >  Cargojet Inc    CJT   CA14179V5036

CARGOJET INC

(CJT)
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Cargojet : Amazon Enter Warrant Agreement Tied to Performance

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08/23/2019 | 08:31am EDT

By Allison Prang

Cargojet on Friday said it will issue warrants to buy nearly 15% of the air-cargo company to Amazon as part of an agreement aimed at expanding its business with the e-commerce giant.

Ontario-based Cargojet will issue the warrants to purchase viable voting shares to an affiliate of Amazon.com.ca Inc. in two different tranches. One of those tranches' vesting is related to the delivery of as much as 400 million Canadian dollars ($300.4 million) in businesses volumes over a six and a half year time span. With those warrants, Amazon is allowed to buy as much as 9.9% of the variable voting shares of Cargojet for $91.78 a share, the air cargo company said.

The other tranche is related to the delivery of C$200 million more in business volumes after that first tranche vests, Cargojet said. With this second tranche of warrants, Amazon can buy as much as 5% more of the company's variable voting shares, Cargojet said. The price of those shares will be determined two years following the agreement.

The new agreement is in conjunction with an existing commercial agreement between Amazon and Cargojet, the airline said.

Cargojet said it thinks this new agreement will bring in more revenue and be earnings and cash flow accretive.

Amazon has similar agreements to purchase warrants with Atlas Air Worldwide Holdings Inc. and Air Transport Services Group.

Write to Allison Prang at allison.prang@wsj.com

Stocks mentioned in the article
ChangeLast1st jan.
AMAZON.COM 0.22% 1821.5 Delayed Quote.21.01%
CARGOJET INC -0.06% 98.41 Delayed Quote.40.51%
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Financials (CAD)
Sales 2019 495 M
EBIT 2019 58,6 M
Net income 2019 17,6 M
Debt 2019 708 M
Yield 2019 0,91%
P/E ratio 2019 94,6x
P/E ratio 2020 78,7x
EV / Sales2019 4,10x
EV / Sales2020 3,56x
Capitalization 1 325 M
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Mean consensus OUTPERFORM
Number of Analysts 10
Average target price 115,40  CAD
Last Close Price 98,41  CAD
Spread / Highest target 38,2%
Spread / Average Target 17,3%
Spread / Lowest Target -8,55%
EPS Revisions
Managers
NameTitle
Ajay K. Virmani President & Chief Executive Officer & Director
James R. Crane Non-Executive Chairman
John Kim Chief Financial Officer, Secretary & VP-Governance
Jamie B. Porteous Director, Chief Commercial Officer & EVP
Paul Victor Godfrey Independent Director
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