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Frontier Gets $75 Million Loan From Perseus
Perseus will provide funding under the proposed DIP credit facility in two installments to support Frontier’s working capital needs.
July 25, 2008
Frontier Airlines has secured a $75 million debtor in possession loan from private equity firm Perseus LLC, which will also buy 79.9% of the reorganized company for $100 million.
Upon court approval, Perseus will provide funding under the proposed DIP credit facility in two installments to support Frontier’s working capital needs. The proposed DIP funding, coupled with Frontier's negotiations with partners to improve liquidity, reduce expenses, and preserve cash is expected to provide sufficient working capital for the company's operations.
"The $75 million commitment in DIP financing from Perseus is a significant vote of confidence in the employees of Frontier, our product and business plan," said Sean Menke, Frontier president and chief executive officer. "Despite the current challenges facing the airline industry, these transactions help point the way towards Frontier's emergence from bankruptcy as a competitive, sustainable airline."
Brian Leitch, senior managing director at Perseus, said the acquisition affiliate will be named Go Flip Go, LLC, “as a symbol of our desire to encourage and preserve Frontier’s unique cultural attributes.”
Frontier and its subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the US Bankruptcy Code on April 10.
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