Frontier DIP congrats

[hockeypilot44]

I have a ton of confidence writing this:

I know MANY who fly for Frontier. They would have given their first born to work for Frontier, and they would give their first born to save that company. Because they respect themselves, each other as a group, and the PEOPLE they work with. Once it's saved though, you can bet they'll DEMAND everything back.

Not exactly your airline "regulars" over there. They're a little dif'rent.....In a good way.

Keep fighting F9. Things are looking UP!

(As always, someone will have to say "No self-respecting pilot group would allow themselves to be talked into a pay cut." Here's one that may have resulted in real "goodwill" - at least enough to attract a serious investor.)

ClassG

BULLSH!T!!!! Paycuts have nothing to do with getting DIP financing. If the company makes it with the paycuts, then it would have made it without the paycuts. Paycuts do not save airlines. Frontier will come back to the pilots for more paycuts before it exits bankruptcy and get it. When this is all said and done, Frontier will not be worth working at if it's still in business.

 

[Green]

that's why this profession sucks. Too many pilots will willingly hand over their wallets to management at the same time the VP's are awarding themselves retention bonuses and stock options. Labor paycuts do not save airlines. But if it makes you feel better to make less money then go for it.

"....and they would give their first born to save that company."

You are kidding I hope????

 

[Cardinal]

Clarification: The most Frontier can get out of the present deal is 100 million. The 75 mil DIP financing will become part of the ownership stake. Upon BK exit Perseus coughs up the extra 25 mil for the 100 mil total. We are not, repeat not getting 175 mil, as some concluded from the press release, which should have been worded more clearly. - Reference Sean's presentation to the company 7/25/08.

 

[F/O]

I never quite understood this. Let's say these investors bought the whole wad for $100 mil. That's about what 3 or 4 airbuses are worth, right? So sell off 4 a/c, recoup your investment, then sell off all the rest and make a few hundred mil profit.

Is this view too simplistic?

 

[yourhairsonfire]

Clarification: The most Frontier can get out of the present deal is 100 million. The 75 mil DIP financing will become part of the ownership stake. Upon BK exit Perseus coughs up the extra 25 mil for the 100 mil total. We are not, repeat not getting 175 mil, as some concluded from the press release, which should have been worded more clearly. - Reference Sean's presentation to the company 7/25/08.

Can someone clarify this as well:

"allowing Perseus to purchase 79.9% of the equity in the reorganized company"...what exactly does this mean?

Stock and equity are not the same thing. Either way...Perseus (GoFlipGo) will have the keys to the house...

 

[Cardinal]

So sell off 4 a/c, recoup your investment, then sell off all the rest and make a few hundred mil profit.

That's a valid concern.

 

[radarlove]

Stock and equity are not the same thing. Either way...Perseus (GoFlipGo) will have the keys to the house...

Yes they are. Once the company is reorganized, the current shareholders get a bag of dirt, the current bondholders get stock in the new entity and Perseus gets a whole bunch of stock and then puts in some more money for even more.

Perseus is one very, very sharp firm. They're going to get theirs coming or going, it makes zero difference if the company gets liquidated or goes public again. Well, that's not true, they make more money if it reorganizes and goes public, but if that doesn't work, these guys aren't going to lose any money.

DIP agreements are a true deal with the devil. You need to make it, but it's like in the Goodfellas movie "F-you. Pay me."

These guys are very sharp, but Frontier better start making moolah and making moolah fast, or they're going to say, "F-you. Pay me."

I bet their $75 million is covered by $150 million in hard assets as collateral. In bankruptcy court, the new guy (DIP) gets priority even over the senior bondholders.

"F-you. Pay me."

 

[Cornelius]

That's funnier than crap mang. That is pretty much what will be going here at F9 if management is in over their heads.

 

[StaySeated]

I never quite understood this. Let's say these investors bought the whole wad for $100 mil. That's about what 3 or 4 airbuses are worth, right? So sell off 4 a/c, recoup your investment, then sell off all the rest and make a few hundred mil profit.

Is this view too simplistic?

If the aircraft were owned outright, then this would be true, but F9 does not own anything outright. They lease 48 aircraft, no equity there. The remaining aircraft have at least two lien holders, with some being superseded in BK court. F9 has encumbered every piece of equity they have, so if we liquidate after the perseus deal, perseus will get whatever fees they attached to the deal in cash and whatever they can get selling the remaining "owned" pieces. If this deal goes through, and if we emerge from BK, it will be very interesting to see what perseus decides to do with its new little toy airline. Things just got real interesting, we should all strap in and enjoy the ride and see what happens. Getting a few more months of liquidity sure beats shutting the doors next month.

 

[USAFftrplt]

Whats up in Pittsburgh??

I flew in to Pittsburgh today and there were about 7 or 8 airbuses parked with all of the covers on them during the middle of the day and not a sole was moving around the planes??????