La Banckrupcy Court pourrait accorder à Republic 100% de Frontier Airlines
Sur Flight :
Frontier Airlines could soon become a wholly-owned subsidiary of US regional operator Republic Airways Holdings if the bankruptcy court overseeing Frontier's Chapter 11
restructuring approves the reorganization plan filed with the bankruptcy court today.
Frontier entered bankruptcy protection in April 2008, and in March of this year Republic
agreed to supply $40 million in debtor-in-possession (DIP) financing to its former partner after supplying part of $30 million in DIP financing to Frontier in August of 2008.
Details of the plan submitted to the bankruptcy court today would allow Republic to purchase 100% of equity in a reorganised Frontier for $108.75 million.
Frontier has also filed a motion for court approval of the investment agreement with Republic, which is subject to higher or better proposals under a court-supervised auction. An additional $40 million of the sale proceeds would be applied as repayment of
the outstanding DIP loan.
Other elements of Frontier's proposed plan of reorganization include unsecured creditors
receiving $28.75 million in cash.
In a statement Frontier explains that both the carrier and its Lynx subsidiary that operates Bombardier Q400 turboprops "would maintain their current names and continue to operate as usual".
Republic earlier this year also took a 50% stake in its Hawaiian partner Mokulele Airlines. Republic operates Embraer E-170 aircraft for Mokulele in Hawaiian interisland markets.
"Adding Frontier to the Republic portfolio of operating companies is an opportunity for both companies to build on recent successes and strengthen the Republic organization
for the benefit of all stakeholders," says Republic chief executive officer Bryan Bedford. Republic's subsidiaries are Republic Airlines, Chautauqua Airlines and Shuttle America.
Frontier plans to seek court approval of the investment agreement with Republic during a hearing scheduled for 13 July.