Gulfstream International Group has reached a final agreement with the Federal Aviation Administration providing for the settlement of certain proposed civil penalties. The agreement calls for the Company to pay $550,000 over a five-year period. The Company has also reached an agreement with Raytheon Aircraft Credit Corporation (“RACC”) to extend its current Lease Amendment and Forbearance Agreement relating to 21 Beech 1900D airliners leased from RACC until December 6, 2010 (the “Lease Termination Date”) on their existing terms and provide for, among other things, the opportunity to purchase the fleet of aircraft from RACC, enabling the company to reduce existing annual lease payments by approximately $5 million.
The Lease amendment and Forbearance Agreement, reached with RACC on May 14, 2010, also includes certain concessions with respect to past payment obligations due in December, 2010, as well as other indebtedness, which is contingent upon closing the aircraft fleet purchase by the Lease Termination Date, and would reduce the Company’s overall obligations to RACC. The net effect of the FAA and RACC agreements, subject to completing the aircraft fleet purchase, would result in a reduction of current liabilities in excess of $1.0 million.
