Zetta Jet (USA) PTE Ltd has announced it has secured USD8.5 million in Post-Petition financing, also termed as Debtor-in-possession financing (DIP financing), from lessor Scout Aviation II, LLC.

Zetta Jet PTE Ltd filed for Chapter 11 bankruptcy protection in California in September this year citing significant losses incurred through alleged fraudulent acts committed by former Managing Director, Geoffrey Cassidy, including the misappropriation of company funds.

As such, the executive charter specialist said in a statement last week that the financing, subject to Bankruptcy Court approval, will enable it to satisfy customary obligations associated with its daily operations, including the timely payment for aircraft usage, fuel, post-petition goods and services, employee wages and other obligations. The operator said that it has filed a motion in a California bankruptcy court, seeking interim approval to use up to USD4.5 million of the USD8.5 million financing commitment. Final approval of the full amount of the financing commitment is expected in December.

"With the help of my advisors, the management team and I have been working on a business plan to restore the company to profitability," Zetta Jet's Chapter 11 Trustee Jonathan King, said. "We have already begun restructuring our aircraft fleet to operate more efficiently and otherwise reduce redundant costs. Now with funding in place, the company will have financial resources to implement that plan and sufficient liquidity to fund the Company through a competitive sale process culminating in emergence under a plan of reorganization. Through this process, we hope to preserve and harvest the going concern value of Zetta Jet to maximize recoveries for the Company's stakeholders, continue to provide a superior product for our valued customers for years to come, and minimize any disruption to our employees, vendors and other constituents."

The financing term sheet states Scout Aviation will sponsor ZettaJet's restructuring plan and will also seek out buyers for its assets. As required under Chapter 11, Zetta Jet will establish a sale process, which will be subject to approval by the Bankruptcy Court, and it intends to file a motion seeking approval of bidding procedures shortly.

Zetta Jet hopes to emerge from Chapter 11 in February 2018.