The agreement calls for Republic Airways Holding Inc. and its majority shareholder, Greenwich, Conn.-based Wexford Capital LLC, to invest $125 million after US Airways exits bankruptcy. US Airways also must secure $350 million in additional financing, as part of the deal.
Late last month U.S. Bankruptcy Judge Stephen Mitchell gave interim approval to plans by Eastshore Aviation, an affiliate of Air Wisconsin Airlines Corp., to loan $125 million to US Airways. The company was seeking $250 million in new investment to fuel its planned emergency from Chapter 11 bankruptcy protection by June 30.
But Monday's agreement is contingent on US Airways securing a total of $350 million in new cash investment, among other demands.
Republic, which operates Chautauqua Airlines and Republic Airlines, wants to be represented on the US Airways board of directors, that US Airways amend and restate its existing jet service agreement with Chautauqua and to use Embraer 170 and 190 regional jets under the US Airways Express brand.
''We are well on our way to securing at least $350 million in new capital and continue to finalize our business plan that will leverage our competitive cost structure and strong market positions in the eastern U.S. and the Caribbean,'' said Bruce R. Lakefield, US Airways' president and chief executive.
Lakefield said the agreement provided US Airways with new equity, reduced debt, enhanced liquidity and a strengthened relationship with a key regional airline partner.
Arlington-based US Airways, which operates its major hubs at Charlotte, N.C., and Philadelphia, will seek court approval for the deal at a March 31 hearing.
