Republic Airways says in preliminary deal to sell Frontier unit

July 26 Fri Jul 26, 2013 12:07pm EDT

July 26 (Reuters) - Republic Airways Holdings Inc said on Friday it has reached a nonbinding deal to sell its Frontier unit, sparking a 5.6 percent rise in its shares.

Chief Executive Bryan Bedford said the terms require certain conditions to be met to reach a binding agreement and complete the potential sale. Republic did not identify the buyer but referred to it as a third party.

"If a binding sales agreement is reached ... we currently would expect such a closing to occur late in the third quarter," Bedford said during an earnings conference call.

Indianapolis-based Republic, which operates regional carriers Republic Airlines and Chautauqua Airlines, has been looking to divest itself of Frontier since late 2011. It bought Frontier out of bankruptcy in 2009.

Bedford said the exclusivity period with the potential buyer goes beyond Republic's current annual meeting date of Aug. 13. The company later said the meeting was rescheduled for Sept 17.

Shares of Republic were up 73 cents to $13.76.