Key Developments For Mesa Air Group, Inc.
Mesa Air Group, Inc. (MESA.O) (Consolidated Issue listed on NASDAQ Capital Market)
AAR CORP. Modifies Support Agreements With Mesa Air Group, Inc.
AAR CORP. )AAR) announced that it has entered into a series of related transactions with Mesa Air Group, Inc. (Mesa). AAR and Mesa amended their parts supply and maintenance agreements for Mesa's CRJ-200 and ERJ-145 aircraft fleet to provide Mesa with increased flexibility to respond to demand fluctuations in the 50-seat aircraft market. In consideration for these amendments AAR will receive a cash payment from Mesa along with 15 million shares of Mesa's common stock. AAR will return to Mesa $6.1 million aggregate principal amount at maturity of Mesa's 2023 notes. AAR does not expect to increase its stock ownership in Mesa, and may sell down its position from time to time as market conditions permit.
Mesa Air Group And AAR Corp. Agree To Modify Certain Maintenance Support Agreements
Mesa Air Group announced that it has reached an agreement with AAR Corp. (AAR) in support of Mesa Air Group's ongoing restructuring efforts. The parties have agreed to amend certain parts and maintenance agreements supporting Mesa Air Group's CRJ200 & ERJ145 aircraft fleet and exchange Senior Convertible Notes due in 2023 (2023 Notes) held by AAR for shares of Mesa Air Group's common stock, in consideration for a cash payment and certain agreed upon future obligations. The parties have agreed to certain amendments to the parts and maintenance agreements which allow Mesa Air Group's to reduce monthly fees paid under such agreements as the number of aircraft in its CRJ200 & ERJ145 fleet is decreased. Additionally, these amendments enable Mesa Air Group to terminate the respective parts and maintenance agreements without penalty, if it disposes of an entire aircraft type.
Mesa Air Group Announces Termination of Turboprop Aircraft Service
Mesa Air Group announced that United Airlines has exercised its early termination rights for Mesa's operation of 10 Dash-8 turboprop aircraft under Mesa's code-share agreement with United Airlines. Mesa plans to work with United Airlines on an orderly transition plan, but, in any event, the date of exit from service is expected to be no later than April 30, 2010.
Republic Airways Holdings Inc. Forms Joint Venture With Mesa Air Group To Operate Hawaii Service
Republic Airways Holdings Inc. announced that it had reached an agreement with Mesa Air Group to form a joint venture (JV) to combine the jet routes currently flown by both Mesa and Republic. Under the agreement, E170 routes currently operated by Republic Airways will be transitioned to jet service provided by Mesa Airlines. The three E170 aircraft will be returned to the mainland by November and will operate in Republic Airways` branded network. Under the terms of the JV agreement, Mokulele shareholders will contribute their ownership of Mokulele to the JV and will own 25% of the new venture. Additionally, current Mokulele shareholders will be obligated to fund up to $1.5 million to capitalize the JV. Republic, which is the majority shareholder of Mokulele, will forgive Mokulele`s $3.1 million outstanding debt to Republic, net of surrendered aircraft deposits.
Mesa Air Group Announces Entry Into an Exchange Agreement With a Holder of Its Senior Convertible Notes Due 2024
Mesa Air Group announced that is has entered into an agreement with a major holder of its Senior Convertible Notes due 2024 (the 2024 Notes) to exchange $14.3 million in aggregate principal amount at maturity of the 2024 Notes for 13,571,428 shares of the Company's common stock, no par value. The number of shares of common stock was determined by dividing $2.85 million, which reflected the parties' agreed upon discounted value of the 2024 Notes, by $0.21, which amount was agreed to by the parties in view of recent market prices for the Company's common stock. The issuance of the common stock in the exchange, which is expected to close on or before August 24, 2009.
