SkyWest announces sale of interest in Trip Linhas Aereas S.A

SkyWest reported that it entered into an agreement on May 23rd, to sell its 26% ownership (20% common and 6% preferred) in the Brazilian airline Trip Linhas Aereas S.A. (“TRIP”) for a price of US$42m. SkyWest has agreed to sell its TRIP shares to Trip Investimentos Ltda., a Brazilian limited liability company affiliated with TRIP. The purchase price is scheduled to be paid in three installments over a two-year period and may be accelerated based on certain conditions under the purchase agreement. As part of the agreement, SkyWest also received an option to acquire 15.38% of the ownership in Trip Investimentos Ltda., the purchaser of the shares, which SkyWest may exercise at its discretion. The call option has an initial set price per share, escalates annually at a specified rate and can be exercised up to between four to six years following receipt by SkyWest of the required installment payments from Trip Investimentos Ltda., under the agreement. SkyWest’s sale of the TRIP shares, as well as the other transactions governed by the purchase agreement, are contingent on TRIP’s receipt of Brazilian regulatory approvals. SkyWest acquired its initial interest in TRIP in August 2008 and has invested a total of US$30m for its 26% interest. Due to SkyWest’s treatment of its TRIP ownership position under the equity method of accounting, it has decreased its investment in TRIP to a current carrying amount of US$23.2m as of March 31, 2012.