RTTNews | Sep 1, 2020 11:04AM EDT

11:04 Tuesday, September 1, 2020 (RTTNews.com) - Shares of Gogo Inc. (GOGO) are currently gaining over 20% on Tuesday morning after the company agreed to sell its commercial aviation business to Intelsat S.A for $400 million.

GOGO is currently trading at $6.26, up $1.12 or 21.81%, on the Nasdaq.

The Gogo Board of Directors has approved the transaction. Intelsat expects to finance the transaction utilizing cash on hand and borrowings under its $1 billion debtor-in-possession credit facility and has obtained support from key economic stakeholders, as well as approval from the U.S. Bankruptcy Court for the Eastern District of Virginia, Richmond Division, to complete the acquisition.

The transaction is expected to close before the end of the first quarter 2021.

Gogo, which will remain a public company, will use the proceeds from the transaction to improve its net debt position and continue to invest in growth opportunities such as Gogo 5G.

Gogo will also enter into a 10-year network services agreement under which Intelsat will have exclusive access to Gogo ATG services for the CA market in North America, subject to minimum revenue guarantees of $177.5 million.

Read the original article on RTTNews ( https://www.rttnews.com/3125423/stock-alert-gogo-to-sell-commercial-aviation-business-to-intelsat-for-400-mln-shares-jump-20.aspx)

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