Business First of Columbus
22 August 2013
After just three years, Milestone Aviation Group is soaring in the helicopter leasing business.
Co-founded and led by former NetJets Inc. CEO Richard Santulli and with its U.S. operations based in Columbus, the young company is expanding at a rapid pace, most recently closing on what it called the biggest debt facility for a helicopter lessor.
Dublin, Ireland-based Milestone got its start with a $500 million private placement in August 2010, a year after Santulli stepped down from NetJets, the Columbus-based fractional jet ownership company he founded. Milestone buys new and used helicopters and leases them to a range of clients, including oil and gas producers, search-and-rescue agencies and medical services providers.
The company, which runs an office in Colts Neck, N.J., has seven employees at its Arena District office.
Milestone has made strides to establish itself in the industry, but none was more important than this month’s closing of a $600 million revolving line of credit. The five-year financing is a rarity for a company three years old, said President Daniel Rosenthal.
The debt facility includes a revolving accordion feature that could expand the borrowing capacity up to $750 million, the company said.
“It will change the way we do business and reinforces the financial strength as a company,” Rosenthal said. “It allows us to be more aggressive about pursuing deals.”
Milestone since 2010 has acquired more than 100 aircraft valued at more than $1.5 billion. It also has future helicopter orders and secured options valued at $2.2 billion. It has leased to 22 operators in more than 20 nations.
In its niche, Milestone aims to move quickly when a customer needs aircraft, said Rosenthal, formerly executive vice president at NetJets.
Offshore drillers have proven to be major clients. While aircraft makes up 3 percent to 4 percent of an oil rig’s production budget, “the other 97 percent is worthless without the asset,” Rosenthal said.
“That’s where leasing has become more attractive,” he said of the industry.
Milestone in July secured a $300 million credit facility to acquire and lease helicopters valued at $400 million to Houston-based Bristow Group, which provides the aircraft to offshore energy companies.
A former Goldman Sachs principal, Santulli formed NetJets in 1984 when he bought Executive Jet, which got its start in Columbus in 1964. NetJets was acquired in 1998 by Berkshire Hathaway Inc.
Santulli was not available for comment.
The company stayed close to its Columbus roots by partnering with Huntington Bank for financing, as well as for advice on debt, interest rates, foreign exchange and depository needs. Huntington played a big part in the $600 million financing deal, though it would not disclose specifics.
For Huntington, financing the unique, high-cost industry is not viewed as an excessive risk, said Michael DiCecco, chief commercial officer and head of the equipment finance division for Huntington.
“It’s not higher risk,” he said. “In fact, we believe specializing (in specific industries) is a de-risking strategy more than a risk-attraction play.”