Cargojet has entered into a strategic agreement with Amazon.com NV Investment Holdings, giving the retail giant voting shares in the Canadian airline.
The agreement is in conjunction with Amazon and Cargojet’s existing commercial agreement for overnight air cargo services, and will incentivise growth to deliver to Canadian customers.
Cargojet will issue warrants to Amazon to purchase variable voting shares that will vest based on the achievement of commercial milestones.
The first tranche of warrants allows Amazon to acquire up to 9.9% of Cargojet’s variable voting shares at C$91.78 per share, which is expected to vest over six and a half years, and will raise C$400 million.
Amazon will receive additional warrants to acquire up to an addition 5% of Cargojet’s variable voting shares with vesting tied to the delivery by Amazon of up to an additional C$200 million in business volumes after the first tranche of warrants is fully vested.
Ajay Virmani, chief executive officer of Cargojet says: “The commercial relationship the Cargojet team continues to build with Amazon has now allowed us to further strengthen and align our long-term strategic commercial interests. Our continuous commitment to provide value added services enables us to earn all of our customers’ trust as the leading overnight air-network operator.”
Adam Baker, vice president global transportation at Amazon says: “Cargojet has been a key player in our Canadian middle mile operations for several years. We’re thrilled to build a longer-term relationship that will allow us to provide even faster service to Amazon customers in Canada.”
