Republic IPO

[lowecur]

Just another indication that regional airlines mgt sees opportunities in the short term on the horizon. The IPO will raise between $70 to $80M for Republic in addition to whatever cash position they have already. I've heard the private investors their have a very strong cash position, and will probably retain the rest of the shares to be sold at some point in the future. I think people will be shocked to see how well funded they are.

I believe they will definitely go for independent flying at some point in the short term. This is something the majors will have to live with if they plan to use these carriers. I don't see any of them getting a better deal from anyone else in todays market place.

I think Republic, Mesa, and Skywest all have a clear understanding of sticking together in this approach. It will be interesting to see if any of the majors takes any action (legal or by initiative) to prevent what could be collusion.

Reuters
Republic Airways sets IPO at 5 mln shares
Tuesday May 11, 12:36 pm ET


WASHINGTON, May 11 (Reuters) - Regional airline operator Republic Airways Holdings Inc. said on Tuesday it planned to offer 5 million common shares in its initial public offering.
The Indianapolis-based company said it expects the shares to sell for $14 to $16 apiece. Republic Airways has filed for a Nasdaq listing under the ticker symbol "RJET" (Nasdaq:RJET - News).

Republic Airways operates Chautauqua Airlines and Republic Airline, providing passenger service in the United States, Canada and the Bahamas on code-share agreements with AMR's American Airlines (NYSE:AMR - News), US Airways (NasdaqNM:UAIR - News) and Delta Air Lines (NYSEAL - News).

 

[storminpilot]

I will be surprised in this environment with them feeding both USAirways and Delta, if this IPO gets off the ground.

Or it may go, but not for $14 to $16.

How much of their revenue is generated by bankrupt or near bankrupt airlines?

 

[lowecur]

I think the pricing will be judged by their long term business model to be presented in the prospectus, and the financial strength of the company. I'll withhold judgement until I see both.

 

[LegacyDriver]

Let me get this straight...a company that depends upon bankrupt and soon-to-be-bankrupt airlines as its only source of revenue wants investors to pony up money for something that could disappear overnight?

Sounds to me like Bedford and Co. are trying to line their pockets with some quick cash before the roof caves in on their house of cards.

I think CHQ is getting too big for its britches with this stuff. I could be wrong of course.

I'm sure BB will get it for five bucks a share but we poor flight crew losers will have to pay three times that...

 

[dav8or]

I think CHQ is getting too big for its britches with this stuff. I could be wrong of course.

I'm sure BB will get it for five bucks a share but we poor flight crew losers will have to pay three times that...

$1.75 I think the last time it came around.

 

[C210drvr]

Here is the link to the IPO information. It appears as if along with the common stock, employee stock, and managment stock option, that Delta will be purchasing 5 million shares as well.

IPO Info

 

[lowecur]

storminpilot

Close to $50M in cash doesn't cut it for $14-$16 per share. If I had seen $150 to 200M, it would have made me feel better about the capitalization.

DL has their hand in this pretty deep. They could own 14.4% of the company if they exercize all warrants. They get first right of refusal on a/c if the UAIR or UAL contract is pulled. I like the fact that the contract can be broken if DL enteres bankruptcy or UAL never emerges.

If the DL and AMR contracts are broken they get stuck with the a/c. That's 55 a/c, or half the fleet. This would bode well should RJET decide to pursue an independent airline future. They don't need all that overhead as they morph.

All in all they are hedged very well to survive if they lose most of their major partners. WexAir, LLC is the major shareholder led by Brian Bedford with 20M shares. I could see WexAir lending them capital again if they needed to pursue an independent strategy.

This is a real speculative stock play, and I would stay away until this industry shakes out a bit.

 

[FlyingDawg]

First quarter profit of $9.9 million, and profit last year of $34 million. If they don't get at least $14/share they will pull the offering AGAIN!