Frontier Airlines Holdings Inc. will be acquired out of bankruptcy court by Republic Airways Holdings Inc. for $108.8 million.
In a statement late on Monday, Frontier said that it filed its proposed plan to reorganize with the U.S. Bankruptcy Court for the Southern District of New York. The company also filed the agreement under which Republic, the Indianapolis carrier, /quotes/comstock/15*!rjet/quotes/nls/rjet (RJET 6.10, +0.10, +1.67%) would acquire Frontier.
Frontier said that if the deal meets conditions including approval by the bankruptcy court, Frontier Airlines and Lynx Aviation would emerge under the current names and operate as usual.
Holders of Frontier's /quotes/comstock/11i!frntq (FRNTQ 0.11, -0.28, -71.79%) current common stock wouldn't receive any recovery under the plan, Frontier said.
The deal is subject to the prospect that other bidders might offer better terms in a court-supervised auction, Frontier said. A court hearing on the plan is set for July 13. Frontier hopes to exit bankruptcy proceedings this summer.
Frontier and its subsidiaries filed to reorganize under Chapter 11 of U.S. bankruptcy law on April 10, 2008.
In the plan filed with the bankruptcy court, general unsecured creditors would receive almost $29 million cash, and $40 million of the sale proceeds would be applied to repay Republic for the debtor-in-possession financing it provided to Frontier.
Reorganizing in bankruptcy court, Frontier's two carriers have become "two of the most efficient operating carriers in North America" and have diversified their revenue streams, President and Chief Executive Sean Menke said in a statement.
Parent Frontier has posted an operating profit for each of the past six months and net income for the past two quarters, the executive said.
Republic Airways is the holding company for Chautauqua Airlines, Republic Airlines and Shuttle America.
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