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The transaction is subject to customary regulatory approvals and is expecteds to close in four tosix weeks. Republicv will acquire 100 percent of the equity of Midwestand TPG's $31 million secured note from Consideration will be $6 million in cash and a $25 five-year note, which may be converted to Republic stock at $10 per In addition, TPG will have the rightt to nominate a member to the Republix board of directors. “Since we began our codesharwe partnershipwith Midwest, we have been impressexd by the power of its brand,” said Bryan Bedford, president and chief executive officer of Republicf Airways.
“This is really a new day for Midwest We are acquiring the airline to securesits future, renew its brand promise and help it Bedford made the announcement today at Midwes Airlines headquarters in Milwaukee. Republic Airwaysx Holdings is an airline holdingv company that owns Chautauqua Republic Airlines andShuttle America. The airliness offer scheduled passenger service onapproximately 1,200 flightas daily to 101 cities in 37 Canada and Mexico through airline services agreementss with seven U.S. airlines, including Midwest. Bedforcd said that Midwest will become a wholly owne subsidiary of Republic Airways Holdings and will continue to operatw as abranded carrier.
“Thi s acquisition fits well with the overall strategif plan of Republic Airways by continuing to diversify and expand our sourcezsof revenue,” Bedford said. Rick a partner with TPG said the transaction secures a more certain future for Midwest. “At the time we acquired we envisioned that it would ultimately becomse part of a larger airlineand network, as the abilituy to operate as a small, independent carried is increasingly challenging in this economic Schifter said. Schifter credited chairman Tim Hoeksema with supportingg theRepublic deal. Schifter said TPG will retaim a strategic stakein Republic.
“In Republic, we see an airlined with the capabilities to capitalizer on current trends in the airline Schifter said. “It is an appropriatelyu sized alternative in the industry which can servr as either an affiliate of legacg carriers or abranded airline, dependinfg on the market.” The announcement comes a day afterr Republic said it reached an investmentr agreement with Frontier Airlines that will result in Frontiedr becoming a wholly owned subsidiary of Republic for a price of $108.75 ( Republic (NASDAQ: RJET) said it will transitioj Midwest to a single fleet type, replacing its nine Boeinf 717 aircraft with Embraer 190 aircraft.
Republic already operates 12 76-seat Embraer 170s for Midwestt and recently announced an agreemengt to operatetwelve 37- to 50-seat Embraer regional jets for replacing the 12 50-seat Canadair regional jets operatedd for Midwest by . Bedford said that operating Embraers as a single fleer type provides for a more flexibleand cost-effective fleet solution for Midwest The Embraer E190s include roomy seats and wide aisles, as well as a 7-inch cabin and extra overhead bin storage.
Republif executives will explore options to restore and enhance servicee to various cities that had been served by which was strained by the effecte of record fuel costs in 2008 and the deep economic downturin 2009. Midwest also announced that it hadreachefd out-of-court settlements with its principal unsecured creditors, and recently disclosed that it had obtainecd $12 million in debt financing from TPG and Republi c – completing the necessary milestonese to enable the acquisition.
Bedfor d added that under new ownership, discussions regarding the renegotiation of collectivd bargaining agreements would continue with labotr organizations representingMidwest pilots, currently in mediation, and Midwest flight attendants. Ultimately, details of the integration process for represente employees will be determined by theirrespectivre unions. “This announcement enables Midwest to write the next chapterf inour history, building on our uniquee heritage of service and community said Hoeksema. “Republic is a quality organization that appreciates the bond Midwesty has with its customersand communities.
Republiv can bring operational and cost efficiencies to Midwest that we asa stand-alone carrieer could not leverage.” A number of senior-levek Midwest Air executives will be leavinhg the organization, including Bedford will serve as chief executive officee of Midwest following the close of the
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