Republic Airways Holdings Inc fka RJETQ

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Republic Airways Reaches Aircraft Deals
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3:02 PM ET 10/28/16 | Dow Jones
By Lillian Rizzo

Republic Airways Holdings Inc. has reached a handful of aircraft-related deals in connection with its chapter 11 restructuring.

Court papers show the company is asking the U.S. Bankruptcy Court in Manhattan to sign off on settlements and an aircraft sale as it continues to work on a plan to restructure its debts and exit chapter 11 protection.

Under one deal, Aerolitoral SA, which does business as Aeromexico Connect, would buy the three aircraft it has been leasing from a Republic subsidiary.

Republic would then use the sale proceeds, the amount of which it didn't disclose, to pay down debt that had been secured by the aircraft.

The hope is to complete the sale by Dec. 31, court papers show.

In connection with the sale, Aeromexico agreed to a settlement of more than $12 million in claims it said it was owed by Republic on prior aircraft leases. Under the settlement, Aeromexico Connect would get a $6.8 million general unsecured claim against one Republic affiliate and a $3.5 million claim against another.

The airliner also said in court papers it has reached a settlement with Bombardier Inc. "after lengthy and difficult arm's-length negotiations," which reduced the millions of dollars Bombardier said it was owed to about $2 million, or "only a fraction of the amount asserted."

The company will bring all of these matters for the approval Judge Sean Lane of the U.S. Bankruptcy Court in New York on Nov. 17 for approval.

Settlements have been an integral part of Republic's chapter 11 case. The company has reached code-share agreements and settlements with United Continental Holdings Inc., Delta Air Lines Inc. and American Airlines Group Inc. since seeking bankruptcy protection in March.

The Indianapolis-based company filed for bankruptcy after facing challenges such as a U.S. pilot shortage that made it difficult to meet obligations in its code-share agreements. Through code-share agreements, Republic operates flights for Delta, United, American and other large carriers.

As part of Republic's long-term deal and code-share agreement with Delta, it also received a $75 million bankruptcy financing package.

Write to Lillian Rizzo at [e-mail]

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October 28, 2016 15:02 ET (19:02 GMT)

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