Monday, June 22, 2009

Frontier Airlines to be bought by Republic Airways

Republic. based in Indianapolis, has been one of three companies financing Frontier’s emergence from bankruptcy. A subsidiary, Republic Airlines, also is one of Frontier’s major unsecured creditors, having filed a $260 million damage claim for Frontier’s breaking an agreement with Republic to operate regional jet service after Frontier filed for bankruptcy protection in April 2008. Under terms of the deal, Frontier will become a wholly owned subsidiary of Republic Airways Holdings after the company serves as the equity sponsor for Frontier’s reorganization plan and buys 100 percent of the equity in the reorganized company. The cost to Republic will be $108.75 million. Frontier filed its proposed reorganization plan with the U.S. Bankruptcy Court of the Southern District of New York Monday. Frontier will seek court approval of the investment agreement at a July 13 hearing and then conduct a roughly month-long auction process where other companies will have the chance to outbid Republic, Frontier spokeswoman Lindsey Purves said.