Gogo obtains $135M credit facility as IPO patiently waits in the wings

Author: Dennis Schaal

With Gogo yet to set in motion its hoped-for IPO, the company is taking out a $135 million line of credit to bankroll expansion across the Atlantic and into Europe.

The leading WiFi provider to airlines in North America filed an IPO registration statement late last year, but like many companies in similar straits following the most recent collapse of the IPO market, Gogo remains on the sidelines.

The IPO was geared to fund general corporate purposes and international expansion.

But, now Morgan Stanley and J.P. Morgan have agreed to provide Gogo with a $135 million credit facility.

The debt financing will be used for the same aims as the potential IPO — international expansion and general corporate purposes, Gogo says.

International expansion can’t await the sometimes tortured maneuverings involved in IPO attempts these days so the credit facility may give Gogo some added flexibility.

Gogo states: “The Company has filed a registration statement on Form S-1 with the SEC.  As a result, the company’s ability to comment is limited by applicable securities law.”

At any rate, while many hotels are offering free WiFi services to guests, any hopes of securing similar services up in the air from airlines should be considered fleeting, at best, because this stuff is expensive.

Gogo has recently entered into a series of partnerships with equipment providers and satellite companies with the goal of offering airlines an array of technology solutions, including those using Ku- and Ka-band satellites.

In one such deal, if a memorandum of understanding turns into a full-fledged contract, then Gogo expects by early 2015 to be offering Inmarsat’s Global Xpress Ka-satellite service to airlines.

That would mean Gogo’s airline partners could offer WiFi service on transatlantic flights.

However, it remains to be seen whether Gogo would be a public company at that juncture or whether it would still be doing things privately.