Frontier Airlines Holdings has received a firm commitment for $40 million in post-petition debtor-in-possession (DIP) financing from Republic Airways Holdings, an airline holding company based in Indianapolis, Ind. The DIP facility is subject to bankruptcy court approval and other pre-closing conditions.
Upon court approval, Republic will provide immediate funding of $40 million to refinance the expiring DIP facility and to support Frontier’s additional working capital needs. Furthermore, as a condition to the loan, Frontier has agreed to allow Republic a stipulated damage claim in the amount of $150 million.
Frontier and its subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code on April 10, 2008. The Company received a total of $30 million in DIP funding from Republic as well as Credit Suisse Securities and AQR Capital in August 2008. The Company will retire that debt by the end of March.
