Fri, Jul 31, 2009
Frontier Would Become A Subsidiary Of Republic
Frontier Airlines Holdings, Inc.
Thursday revealed that Southwest Airlines Co. has submitted an
initial non-binding proposal to acquire Frontier under the auction
procedures established in Frontier’s Chapter 11 bankruptcy
cases and approved by the U.S. Bankruptcy Court. The bid is
reported to be $113.6 million.
As previously announced, on July 13 the judge presiding over
Frontier’s Chapter 11 bankruptcy cases in the U.S. Bankruptcy
Court for the Southern District of New York approved a proposed
investment agreement between Frontier and Republic Airways
Holdings, Inc. Pursuant to the investment agreement, Republic
agreed to purchase 100% of the stock of Frontier Holdings upon its
emergence from bankruptcy for $108.75 million, so long as certain
conditions are met. Frontier Airlines Holdings would become a
wholly-owned subsidiary of Republic, an airline holding company
that owns Chautauqua Airlines, Republic Airlines and Shuttle
America.
The Republic investment agreement
provides for an auction period, during which Frontier may seek
higher or otherwise better competing bids. If Frontier identifies
such a bid, it can terminate the Republic investment agreement and
accept the other offer. Under the auction procedures approved by
the Court, interested bidders must submit an initial proposal by
Aug. 3, 2009, and a final proposal by Aug. 10, 2009. Frontier and
its advisors, in consultation with the Unsecured Creditors’
Committee appointed in Frontier’s Chapter 11 cases, will
conduct an auction, if necessary, on Aug. 11, 2009, to consider all
qualified proposals and determine the highest or otherwise best
proposal.
Frontier currently expects to emerge from Chapter 11 this
fall.
Frontier and its subsidiaries filed voluntary petitions for
reorganization under Chapter 11 of the U.S. Bankruptcy Code on
April 10, 2008. More information about Frontier’s Chapter 11
proceedings is available online.
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