Frontier Airlines gets $40 million DIP Financing

[Eagle757shark]

UPDATE 1-Frontier Airlines gets $40mln DIP commitment

Thu Mar 5, 2009 7:41pm EST
*Republic to provide $40 mln DIP financing to Frontier
*Republic to get damage claim of $150 mln
*Agreement needs court approval
NEW YORK, March 5 (Reuters) - Frontier Airlines Holdings Inc (FRNTQ.PK: Quote, Profile, Research, Stock Buzz) said on Thursday it received a commitment for $40 million debtor-in-possession financing from Republic Airways Holdings Inc (RJET.O: Quote, Profile, Research, Stock Buzz).
The airline, which filed for Chapter 11 bankruptcy protection on April 10, 2008, said the new financing, which matures in April, preserves its stability as it seeks a plan to emerge from bankruptcy later this year.
It said that the financing comes with a condition that Frontier allow Republic a stipulated damage claim in the amount of $150 million. The agreement also needs to be approved by bankruptcy court.
Frontier already received $30 million in DIP funding from Republic and Credit Suisse Securities and AQR Capital in August 2008. Republic said in the statement that Frontier is on the right path to emerge from bankruptcy this summer. (Reporting by Sinead Carew; Editing by Gary Hill)

 

[TAWS]

$70 million in DIP financing plus a claim for $150 million = ????????????

 

[tie1on]

welcome to the new mesa guys

 

[ROSWELL41]

Whats the motive in all of this for RAH? $70 million for what?

 

[GuppyWN]

......... an airline.

Gup

 

[Flying the Line]

Maybe United will "repay" them with more contracts if they get rid of the competition.

 

[scarlet]

Should say Republic takes other airlines money and gives to Frontier. Cooking the books yet again.

 

[spitfire1500]

40 million....in this industry is "spit in a bucket".

 

[Fubijaakr]

GREAT! Republic is buying ANOTHER airline to run into the ground. Ask the Midwest boys how that Republic loan worked out.

Midwest got the money, Republic got the outsourced flying and the Midwest pilots all got furloughed.

Heads up, F9. Those Republic bastiges are coming for you next. When they announce they're taking over your flying, they'll come stand on the informational picket line with you while they're updating their Jepps adding Denver plates.

 

[UND_Sioux]

You don't know what the he!! you are talking about. Without DIP (Debtor in Possession) financing, there is no exit from bankruptcy. Frontier goes bye-bye. RAH already flew under Frontier colors, and I doubt that it will happen again in the near future if ever. Since Republic has some cash, and there is no additional flying in the near future, maybe investing it in a good airline so it can stay running and maybe emerge from all of this with a product that can make some money in the future is a good thing. It seems like a win-win to me.