Agreement Term Extended to 2033 with revenue target of up to C$3.2 billion
Cargojet Inc. has announced that it has renewed its strategic agreement with DHL Network Operations (USA) Inc., an affiliate of DHL Group, until March 31, 2033. DHL will have two consecutive renewal options, each for an additional two-year term, potentially extending the term of the Agreement until March 31, 2037.
Since commencing its business relationship with DHL in 2005, Cargojet has significantly broadened its service portfolio over the subsequent two decades, enhancing its operational scope and capabilities and turning this into a true partnership. Under the Agreement, Cargojet will offer its entire range of air-transportation services, including ACMI, CMI, charter, and aircraft dry lease services to DHL to support DHL’s global logistics network. Cargojet currently utilizes a fleet of Boeing 767 and Boeing 757 freighters to service DHL’s global requirements. Under this expanded strategic partnership, DHL will maintain a minimum monthly block hours guarantee and provide Cargojet with a preferred opportunity to fly additional routes as it rearranges or adds additional capacity globally.
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“Securing the confidence of DHL Group underscores the strength of Cargojet’s value proposition as a long-term strategic partner. This deepened alliance is a testament to our team’s relentless commitment to delivering industry-leading on-time performance and operational flexibility. Their efforts to earn the trust of DHL every single day continue to position Cargojet as a key enabler of global logistics,” said Executive Chairman Dr. Ajay Virmani.
“Cargojet is an important strategic partner and delivers high quality, capacity, and flexibility to DHL Express, operating key routes for us into Canada, Mexico, and Latin America. We are pleased to extend our long-standing relationship with Cargojet and look forward to future expansion where mutually beneficial to both organizations,” said Travis Cobb, Executive Vice President, Global Operations and Aviation, DHL Express.
In addition, to align interests and strengthen the long-term strategic relationship, Cargojet will fully terminate the warrants to acquire 1,645,000 voting shares issued to DHL in March 2022 and issue warrants to acquire up to 1,000,000 (one million) of Cargojet’s outstanding voting shares, representing up to 6.63% of Cargojet’s shares (on a non-diluted basis as of the date hereof), at a price of C$93.61 per share over eight years, with vesting tied to the delivery by DHL of up to C$3.2 billion1 in business volume during the same term.
