Frontier Airlines today said it found a better debtor-in-possession offer than the $75 million deal announced late last month with private investment firm Perseus LLC. Frontier said it plans to move forward with the alternative deal with Republic Airways Holdings, Inc., Credit Suisse Securities, and AQR Capital, which are offering the carrier up to $75 million in DIP financing "with an immediate firm commitment and funding of $30 million."
Frontier, which has been operating under Chapter 11 bankruptcy protection since April, said the deal must first be approved in bankruptcy court. The carrier said the new financing offer "provides Frontier with lower financing costs, less restrictive covenants and greater flexibility to pursue strategic opportunities without being constrained by more restrictive DIP provisions" than the one extended by Perseus
(BTNonline, July 25).
Frontier President and CEO Sean Menke in a statement said, "The agreement by members of our unsecured creditors committee to extend this financing commitment is a tremendous vote of confidence in our company and its business plan. After a careful examination of this offer against the offer Perseus provided last week, we believe this new agreement offers immediate access to greater liquidity under more favorable terms."