Oak Hill reinvests in Southern Air

In addition to receiving an additional $55m in investment capital, the cargo airline has renegotiated its credit agreements to extend debt maturities to 2015.

Oak Hill Capital Partners will invest an additional $55 million in portfolio company Southern Air Holdings, a global cargo carrier specialising in the provision of block space and aircraft, crew, maintenance and insurance services. Also, Southern Air has also renegotiated its credit agreements, extending its long-term debt maturities to 2015.

Oak Hill declined to comment beyond the press release.

Southern Air

The investment will be used to improve and expand Southern Air’s fleet airplanes, including 777Fs and 747-400s, the firm said in a statement. The company recently added two Boeing 777 Freighters to its fleet, and will likely add two 777s along with four 747-400s in 2012. Last month, Southern Air signed a 12-year maintenance contract with MTU Maintenance Hannover that is expected to cost the company around €150 million over the lifetime of the agreement, according to a statement.

Oak Hill purchased a majority stake in Southern Air in 2007 for an undisclosed amount. The firm merged the airline with its other portfolio company, Cargo 360, to create Southern Air Holdings. In addition to Southern Air, Oak Hill owns two aircraft leasing and acquisition companies, OH Aircraft Acquisition and Avolon, according to its website.

In July, Oak Hill sold Primus International, an aerospace manufacturer of structural components, assemblies and kits for doors, flight controls and control mechanisms, to Precision Castparts for $900 million.

Oak Hill manages more than $8 billion of committed capital. One of the firm's partnerships, Oak Hill Advisors, is in the process of raising its OHA European Strategic Credit fund, which is targeting $750 million for European distressed debt, according to a source with knowledge of the fund.