MINNEAPOLIS (AFX) - MAIR Holdings Inc. on Monday said it planned to buy out Northwest Airlines Corp.'s stake in the company, while agreeing to let its Mesaba Airlines subsidiary exit bankruptcy as a Northwest subsidiary.
Under one agreement, MAIR agreed to purchase the 5.7 million shares of its stock held by Northwest for $6.25 per share, or about $35 million in total. The companies expect the deal to close before April 15.
Among other terms of the agreement, Northwest's warrant to buy 4.1 million shares of MAIR stock will terminate, and Northwest and MAIR will release claims against each other.
Under the second agreement, Northwest will allow a $145 million claim by Mesaba in Northwest's Chapter 11 bankruptcy proceedings. Mesaba, which flies regional service under the Northwest name, will cancel its stock and become a subsidiary of Northwest.
MAIR estimates it could receive between $30 million and $60 million after all distributions are made under Mesaba's plan of reorganization.
The agreements need approvals from bankruptcy courts overseeing Northwest's and Mesaba's Chapter 11 proceedings.
MAIR shares fell 8 cents to close at $7.33 on the Nasdaq, and Northwest shares rose 11 cents, or 2 percent, to $5.55 in over-the-counter trading.
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