Judge approves Republic’s plan to buy Frontier-WEB ONLY

Frontier Airlines Holdings Inc. spokesman Steve Snyder said the judge approved the plan at a hearing today in New York.

Republic, a regional carrier that currently flies for other airlines, is offering $108.8 million to take Denver-based Frontier out of bankruptcy protection. Any competing bids are due by Aug. 10. If other bidders come forward, an auction would take place in bankruptcy court on Aug. 11.

Republic has already supplied a $40 million debtor-in-possession loan to Frontier and holds a $150 million unsecured claim, so it’s not a surprise that it is on track to buy the airline.

The plan calls for Republic to own all the equity in the newly reorganized Frontier. Republic operates a regional airline under its own name as well as Chautauqua Airlines and Shuttle America. Denver-based Frontier, known for its planes with animals painted on the tails, flies from Denver to points around the United States.

The plan would give unsecured creditors $28.8 million in cash. An additional $40 million of the sale proceeds would repay Republic’s loan. Frontier said its current shareholders would get nothing.

Frontier Airlines Holdings Inc. filed for bankruptcy protection in April 2008.

Republic also has a deal in the works to acquire Midwest Airlines for $31 million, the airline announced late last month.

Republic will buy Milwaukee-based Midwest from TPG Capital, a Fort Worth, Texas-based private equity firm. The transaction is subject to regulatory approvals and is expected to close this month or in August.

Republic will pay TPG $6 million in cash, plus a $25 million, five-year note, which may be converted to Republic stock at $10 per share. In return, Republic will receive 100-percent ownership of Midwest and TPG’s $31 million secured note from Midwest.

TPG also will receive the right to nominate a member to Republic’s board of directors.