Surf Air Mobility refinances debt, secures $21.6M asset-backed loan

Surf Air Mobility Inc. (NYSE: SRFM) announced two debt financing transactions intended to restructure its balance sheet and reduce shareholder dilution, according to a company press release.

The Los Angeles-based air mobility company has entered into a definitive agreement to refinance its existing senior secured convertible note, which carries an outstanding principal of approximately $46.9 million. The refinancing would split the balance into a new $16.9 million senior secured convertible note due 2027 and a new non-convertible $30 million senior secured term note due 2028. The restructuring would reduce the convertible portion of the debt by 64% and cut monthly amortization payments from up to $4 million to up to $2 million. The company expects to close the transaction on or about July 1, 2026, subject to closing conditions.

The $30 million term note will be non-amortizing and non-interest bearing until January 2027. Payments on the convertible note may be made in cash or stock, subject to certain conditions.

Separately, certain subsidiaries of Surf Air Mobility received the first disbursement of a new non-convertible $21.6 million asset-backed loan secured by new and existing aircraft. The loan will fund in two tranches, with a second disbursement of $14 million expected within 30 days, subject to conditions including a guaranty by Surf Air Mobility.

Chief Financial Officer Oliver Reeves said the transactions are intended to "shift the majority of our convertible debt to term debt to minimize shareholder dilution," adding that the company expects "significantly lower amortization, less dilution, and far greater flexibility around our liquidity going forward."

Chief Executive Officer Deanna White said stability in the capital structure would allow the company to focus on operations and the commercialization of its SurfOS software platform, referencing recent agreements with Wheels Up, Palantir, and BETA Technologies.

The securities being issued have not been registered under the Securities Act of 1933 and are being offered under applicable exemptions. Surf Air Mobility has agreed to file a registration statement with the SEC covering the resale of certain shares underlying warrants issued to asset-backed loan lenders.

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