Republic’s Investment Agreement Approved
Auction period runs until Aug. 10

Today, the judge presiding over our Chapter 11 bankruptcy case in the U.S. Bankruptcy Court approved the proposed investment agreement by Republic Airways Holdings, Inc. Under the agreement Republic will purchase 100% of the Company’s stock upon emergence for $108.75 million, so long as certain conditions are met. Frontier Airlines Holdings, Inc. would become a wholly-owned subsidiary of Republic, with both Frontier and Lynx continuing to operate as usual under their current names.

The investment agreement provides for an auction period, during which the Company may seek higher or otherwise better competing bids. If such a bid is identified, the Company can terminate the Republic investment agreement and accept the other offer. Any interested bidders must submit an initial proposal by Aug. 3 and a final proposal by Aug. 10. If necessary, we will conduct an auction with the Unsecured Creditors’ Committee on Aug. 11 to consider all qualified proposals and determine the highest or otherwise best proposal.

Under this timeline the Company expects to emerge from Chapter 11 this autumn

 

I'm certain other bidders will appear since Frontier a steal at these prices. Let's all hope for the best..............

 

Wont United be interested?? It might help with yields out of DEN ... then again Southwest is in town now ...

 

Not that cheap...

A federal judge on Monday approved Frontier Airlines' plan to exit bankruptcy with a sale to Republic Airways Holdings, setting up an auction process that will last through Aug. 11.

Under a plan announced June 22, Indianapolis-based Republic Airways (NASDAQ: RJET) would pay $109 million to buy Denver-based Frontier’s equity. Frontier would become a wholly-owned subsidiary of Republic.

In March of this year, Frontier received a commitment for $40 million in post-petition debtor-in-possession (DIP) financing from Republic Airways Holdings to support its working additional capital needs. As part of that agreement, Frontier agreed to allow Republic’s damage claim in the amount of $150 million.

Monday’s approved reorganization plan calls for Frontier’s general unsecured creditors to receive $28.75 million in cash, with an additional $40 million of the sale proceeds applied as repayment of the outstanding DIP loan. If approved, the company’s current equity would be extinguished and holders of that equity would not receive any recovery.

“This agreement represents a major milestone in our ongoing efforts to position Frontier to emerge from bankruptcy as a competitive, sustainable airline,” Frontier President and CEO Sean Menke said last month.

 

I think United other things to worry about rather than aquiring other airlines.

 

Didnt United try competing with Frontier and Southwest with their TED opperation??

 

Yep, not cheap. I would appear that the highest bidder, not being RAH, would have to shell out $150 mil to RAH on top of what they bid.

 

IF someone out bids RAH then they will not have to fork over $150M + the purchase price. Remember that's a $150M "damage claim." Can RAH prove damages if another company outbids them? Not sure but I'd say no seeing that RAH will still retain all of their DIP rights. It reads to me that if F9 files Chapter 7 then RAH will have a $150M claim, not if someone else purchases them.

So if someone else wins the bid then the RAH : F9 contract continues until F9 settles the terms of the $70M DIP.

 

The $150 mil claim is what Frontier had agreed to pay to buy them. If the purchase does not occur, they still owe RAH $260 mil. If someone out bids RAH, the highest bidder would have to pay $260 mil (the original claim owed) to RAH plus whatever they bid. Oh I forgot, they would ALSO have to pay back RAH the $40 mill DIP back as well!

Bedford not stupid!

 

Hmm, better situation for RAH than I thought. Oh well, I am not afraid to admit when I am wrong, which seems to happen a lot.