NetJet out for $1.4B

Warren Buffet’s NetJets has hired Goldman Sachs to raise up to $1.4 billion in debt for the executive air-travel company, according to a government filing.

NetJets has $1.2 billion of short term debt notes outstanding as of early February, documents show. The company became a subsidiary of Buffet’s Birkshire Hathaway holding company after the billionaire investor bought it in 1998.

NetJets sells private jet services to wealthy individuals. The company recently partnered with the The Jonas Brothers to fly the popular musical trio to various movie theaters nationwide for surprise concerts.

It’s not unusual for air-travel companies to carry significant debt on their balance sheets. Delta Airlines, for example, has over $10.1 billion in debt and Continental has nearly $6 billion in debt. Air-travel companies typically take out large loans to buy aircraft, as NetJets did last year, paying $1.9 billion for 40 jets from Gulfstream.

NetJets Europe recently acquired Egelsbach Airport in Germany for an undisclosed sum, according to reports. The airport is 16 miles from downtown Frankfurt and one of the country’s busiest.

Goldman Sachs stands to collect $700,000 for its role in the fund-raising.

NetJets’ debt financing may also be used to counter increasing competition from XOJet, a private aviation company backed by buyout firm TPG. XOJet said it had raised $2.5 billion in financing from Middle Eastern investors in May 2008. All but $85 million of that money is loans.

Other investors include the Abu Dhabi Investment Authority’s real estate arm called Tasameem and Export Development Canada. XOJet had raised $143 million in September 2007 from TPG and Lehman Brothers and secured a $220 million aircraft lease financing from Lehman, according to reports. —Alexander Haislip