TORONTO — Cargojet Inc. has signed a new agreement with DHL Network Operations (USA) Inc. to provide air-transportation services for DHL's global network that it says will boost earnings and help diversify its services.
The agreement, which expands the relationship between the two companies, has a term of five years with a renewal option for an additional two years. Financial terms were not disclosed.
Under the deal, Cargojet will provide services to support DHL's international requirements for Europe and North, South, Central and Latin America, as well as Asia.
Cargojet uses 12 freighters to service DHL's current requirements.
DHL intends to add five additional B-767 freighters during the 2022-23 time frame. It also plans to be Cargojet's inaugural launch customer for the B-777 wide body long-range cargo aircraft, which are expected to begin flying in late 2023 or early 2024.
In addition, Cargojet will issue to DHL warrants to acquire up to 9.5 per cent of its outstanding voting shares at a price of $158.92 per share over a period of seven years, with vesting tied to the delivery by DHL of up to $2.3 billion in business volume during the same term.
This report by The Canadian Press was first published March 29, 2022.
Companies in this story: (TSX:CJT)
The Canadian Press
