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Interview conducted by: Lynn Fosse, Senior
Editor, CEOCFO Magazine, Published – May 5, 2014
CEOCFO: Mr. Logullo, would you please provide an overview of Basta
Holdings, including its business operations and target markets or
industries?
Mr. Logullo:
Basta Holdings provides contract procurement, business
development and management services in the aviation and logistics industries
and has a management team that has
been highly successful in the aeronautical industry for 10 years.
Through a contract management agreement, Basta Holdings currently operates
in the United States, Latin America, the Caribbean, Europe, and Asia and
intends to implement an aggressive growth strategy in the Chinese aviation
markets.
The company’s
primary services include global helicopter and fixed wing ACMI leasing to
government and non-government agencies also known as NGO’s, firefighting
operators and various S&P 500 companies and other large corporations. An
ACMI lease is a turnkey leasing arrangement whereby Basta Holdings provides
an aircraft, complete crew, maintenance, and insurance to the entities
mentioned above as a
broker
of air travel for an hourly operation fee.
Through these ACMI leases,
Basta Holdings provides dedicated aircraft and airlift
support specializing in serving remote, rugged and hostile regions. The
typical contract duration for the company’s ACMI leases is 3 years and
requires a minimum of 60 flight hours per month and have an average cost of
$5,000 per flight hour.
Some of the operations our company provides ACMI leasing for include cargo
and passenger transportation, medevac and air ambulance, emergency
evacuation, firefighting, mining, logging and offshore oilrig support,
aerial mapping and surveillance, search-and-rescue missions, air ambulance
and humanitarian aid.
In addition to providing ACMI leasing services, Basta Holdings is involved
in private aviation services industry and has plans to acquire MRO and FBO
facilities worldwide, primarily in the US and China.
To clarify for our shareholders and potential investors, an MRO is a
facility that provides aircraft with Maintenance, Repair and Overhaul
services. These facilities essentially serve as a garage or repair shop for
large aircraft whereby their operators generate revenue by providing a full
range of repair and refurbishing services.
Basta plans to purchase 2 MRO’s located in the US in the near future whereby
its main revenue source will come from selling large Sikorsky Aircraft that
it refurbishes at its MRO facilities for a large profit. The company will
also generate revenue from its maintenance and repair services in addition
to its refurbishing business.
In addition to MRO’s, Basta Holdings plans to purchase FBO’s as well. An FBO
is a fixed-based operator that serves as a hangar facility used to store and
refuel aircraft. BSTA will generate revenue from its monthly fees it charges
its clients for the use of its FBO facilities.
The company’s management has been highly successful in the aeronautical
industry for 10 years and plan to utilize their extensive experience to
establish a significant presence in the global emerging markets for heavy
helicopter leasing and private aviation services, particularly China. Basta
Holdings already operates in the United States, Latin America, the
Caribbean, Europe, and Asia.
CEOCFO: Would you please go over some of the company’s recent highlights
or news?
Mr. Logullo:
On April 10th of this year we
announced that the company has assumed management of
revenue-generating contracts in the field of heavy helicopter long-term
leasing as well as private business aviation operations. This was through a
revenue-sharing agreement with WAB International, which generated $70
million in revenue from its contracts in 2013.
Additionally, on April 24th, Basta Holdings announced an
agreement with Monarch Air Group to launch
commercial operations of one-way private jet charters with operations
to commence by mid August. The Company intends to lease an entire fleet of
light jets and has already leased the first aircraft to be used in this
program.
CEOCFO:
Would you explain any current trends in BSTA’s target industry and the
company’s competitive advantages that will help it succeed in this market?
Mr. Logullo:
What makes Basta Holdings a unique investment opportunity and positioned for
success in the global aviation markets is its expert management team that
has several years of experience in the logistics and international aviation
projects, working on 4 continents and 8 foreign countries.
One of the most obvious trends is the incredible growth curve that China’s
aviation industry will see. Compared to the world average of 3.9 helicopters
per 1 million people, China is currently equipped at a ratio of 0.25
helicopters for every 1 million people.
Because of our strong management team, which includes our Director Sophie
Xue, who will be spearheading our Chinese expansion efforts, we are poised
to take advantage of the huge demand for rotary aircraft in China’s domestic
market. In fact, Basta Holdings is already in discussions with some of
China’s largest aviation companies.
To elaborate further on the incredible growth being experienced in the
Chinese market, consider the fact that China had only 350 civil helicopters
in 2013 compared to 10,000 in Europe and 12,000 in the US. With an expected
number of around 2,300 helicopters needed in China, the demand is extremely
high and we believe Basta Holdings is primarily positioned to capitalize on
this.
With a client list that includes the Department of Defense, the United
Nations, State Department, World Food Organization and other world-class
organizations and corporations, Basta Holdings is more than capable to
provide the types and quality of aircraft that is China will demand moving
forward.
CEOCFO:
Would you provide us with a brief background and some key highlights of
management?
Mr. Logullo:
The Company’s CEO, Dr. Jacob Gitman, holds a PhD and has had extensive
experience and success through the aviation industry and has developed and
maintained relationships with the Department of State, Department of Defense
(DoD and other large non government agencies around the world.
Sophie Xue, as I mentioned earlier, is a board member and Director of Basta
Holdings. She has directed, managed or consulted for Endaxi Capital Partners
NYC, Desmond Capital Hong Kong, Shanghai Golden Atlas Capital, Chongqing
helicopter investment company and Qingdao Free Trade port and has extensive
industry experience and relationships that will greatly benefit Basta to
enter this rapidly growing market.
CEOCFO:
What are some milestones we should look for Basta
Holdings to achieve over the next 12 months?
Mr. Logullo:
As I mentioned earlier, Basta Holdings intends to acquire 2 US-based MRO’s
within the next 6 months, using proceeds from a $5 million capital raise
that the company is on the verge of entering into.
Additionally, Basta Holdings plans to incorporate Basta Holdings in Hong
Kong and China,
establishing offices in the free trading zone of Shanghai. The company will
also apply for a
CAAC Part 91 and part 145, which are licenses necessary to operate MRO’s and
FBO’s
in China. Following the receipt of these licenses, Basta plans to
purchase/open/establish one or multiple MRO’s.
Also, as recently announced, BSTA has entered into an agreement with Monarch
Air Group to launch commercial operations of one-way private jet charters
and expects to commence operations by mid August, 2014.
The company has already leased the first aircraft to be used in this
program, which will be
delivered by May 5th and intends to lease an entire fleet of
light jets prior to August.
CEOCFO:
Why do you feel Basta Holdings is a good
investment?
Mr. Logullo:
First and foremost the fact that Basta Holdings has steady multi-million
dollar revenues that are guaranteed by contracts with some of the world’s
most prominent government and non-government organizations.
The company’s current contracted business positions Basta Holdings to bring
in over $11 million in revenues without bringing any new business and its
only our first year of being public.
Also, Basta Holdings is debt free and expects to remain debt-free throughout
our expansion.
As I mentioned earlier, the company intends to enter the Chinese aviation
market which is on the verge of tremendous growth and between the industry
relationships of our board member, Sophie Xue as well as our experience and
ability to successfully deliver this service in the most difficult global
environments in the world, we feel that Basta Holdings is in an optimal
position to successfully enter this market which would fuel a large increase
in revenue and shareholder value.
We estimate that our revenues will grow to $19 million in 2015 and
approximately $30 million in 2016. This should be very compelling to
potential shareholders because our projections are actually very
conservative yet still show 58% annual growth within the next 2 years.
Basta Holdings has guaranteed revenue in the form of government contracts
and an aggressive growth strategy to establish a significant market presence
in the explosive Chinese Aviation market as well as the global FBO and MRO
markets.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995:
The financial projection(s) contains forward-looking statements as that term
is
defined in the Private Securities Litigation Reform Act of 1995. These
forward-looking statements include, but are not limited to, statements that
relate to the intent, beliefs, plans or expectations of the Company or its
management. All forward-looking statements made by the Company involve
material risks and uncertainties and are subject to change based on factors
beyond the Company's control. Accordingly, the Company's future performance
and financial results may differ materially from those expressed or implied
in any such forward-looking statements. Such factors include, but are not
limited to, those described in the Company's
filings with the Securities and Exchange Commission. The Company will not
undertake to publicly update or revise its forward-looking statements even
if experience or future changes make it clear that any projected results
expressed or implied therein will not be realized.
disclaimers
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About
Basta Holdings Corp. (BSTA)
