US Airways agrees second $125 million finance package

US Airways agrees second $125 million finance package    US Airways Group Inc. has reached its second $125 million agreement with an investor group to fund its restructuring under bankruptcy protection.
   US Airways said it has reached an agreement with Republic Airways Holding Inc., (Republic) and its majority shareholder, Wexford Capital LLC, on an equity and financing package that includes a $125 million investment upon US Airways’ emergence from Chapter 11.
   Greenwich, Conn.-based Wexford holds a majority interest in Republic, which operates Chautauqua Airlines and Republic Airlines.
   In addition, prior to the effective date of US Airways’ plan of reorganization, but no later than Dec. 31, US Airways may exercise an option to obtain approximately $110 million through the sale of certain assets, including 10 EMB-170 aircraft owned by US Airways and the three EMB-170 aircraft committed for delivery to US Airways. Republic would enter into a regional jet service agreement that would continue the operation of the aircraft as US Airways Express. In addition, Republic would simultaneously lease back the slots to US Airways. After the effective date of US Airways’ Chapter 11 plan of reorganization, in the event that US Airways does not exercise the slots sale/leaseback option, Republic has an option to purchase/assume debt and leases for all 28 EMB-170 aircraft and to fly them as US Airways Express.
   According to US Airways the proposed equity investment is contingent on it securing a total of $350 million in new cash investment, including the $125 million from Republic and the $125 million previously secured from Eastshore Aviation, LLC, to finance the US Airways Plan of Reorganization and other conditions, including Republic being satisfied with US Airways’ business plan.
   The agreement also includes a commitment by US Airways to amend and restate its existing jet service agreement with Chautauqua.
   “We are very pleased to have secured the support of a second, well-regarded investor and airline partner to help us build and finance our plan of reorganization,” said Bruce R. Lakefield, US Airways president and chief executive officer. “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,” he added.
   US Airways said that following the new equity commitments, General Electric’s GECAS subsidiary and other affiliates have agreed to US Airways’ request to extend the date by which the company will file its plan of reorganization until April 15.