Originally Posted by
frankwasright
Nope,try again:
“Under the terms of the stock purchase agreement, which has been approved by the Company’s board of directors, the buyer will acquire all of the outstanding shares of Frontier in a transaction valued at approximately $145 million, of which $36 million (subject to certain adjustments under the purchase agreement) is to be paid in cash for the equity of Frontier and the balance is indebtedness that will be retained by Frontier. As part of the transaction, under a separate agreement, the Company will assign to Frontier all of the Company’s rights under agreements relating to the Company’s Airbus A320neo order for additional cash consideration.”
Two investment firms interested in Frontier Airlines - The Denver Post
I'm not sure what to think. Articles like this one from April mention $1 billion in debt and lease obligations, but the recent sale articles make no mention of such a large amount. So is the bulk if that debt the lease obligations, or is RAH assuming additional debt and hoping no one notices? Like I said, I have no idea, but the numbers just don't seem to add up from what was reported in April vs. today.
Indianapolis-based Republic bought Frontier out of bankruptcy in 2009 for $109 million, plus the assumption of $1 billion in debt and aircraft lease obligations.
A prospective buyer might pay up to $50 million for Frontier, then invest up to an additional $150 million to recapitalize the airline. It would also take on the carrier's debt, placing the total value of the deal at roughly $1 billion, according to Dow Jones.
Either way, it baffles me how many bad decision after bad decision Bedford is allowed to make, and the RJET BOD continues to retain him as CEO. I'd be furious if I were an investor.