NASDAQ - AMEX - NYSE Under A Buck

[Lazytncajun41]

MESA >MESA AIR GROUP, INC. (Nasdaq: MESA) (the "Company") announced today that is has entered into separate agreements with certain holders of its Senior Convertible Notes due 2024 (the "2024 Notes") to exchange $83.7 million in aggregate principal amount at maturity of the 2024 Notes for an aggregate of $4.9 million in cash, 10.9 million shares of the Company's common stock, no par value (the "Common Stock"), and $16.3 million in aggregate principal amount of the Company's new 8% senior unsecured notes due 2012 (the "2012 Notes"). The issuance of the Common Stock and 2012 Notes in the exchange, which is expected to close on or about February 25, 2009, is exempt from registration under the Securities Act of 1933, as amended, pursuant to Section 3(a)(9) and Section 4(2) thereof. These new agreements have terms that are substantially similar to former agreements with the same holders of 2024 Notes that were previously rescinded.

(Logo: http://www.newscom.com/cgi-bin/prnh/19990210/LAW065)

The execution of the above exchange agreements follows the previously announced transactions summarized below and concludes the Company's repurchase obligations under the Indentures governing the Senior Convertible Notes due 2023 (the "2023 Notes") and 2024 Notes and the Company's efforts to effectuate an overall restructuring such Notes:

*During the first two weeks of February 2009, the Company (i) issued 3,434,000 shares of its Common Stock in satisfaction of its obligation to repurchase $1.4 million in aggregate principal amount at maturity of its 2023 Notes from holders of 2023 Notes that had exercised their put rights arising under the indenture governing the 2023 Notes and forbearance agreements between the Company and certain of these holders, and (ii) completed transactions with certain holders of its 2023 Notes to purchase an additional $29,071,250 face amount of 2023 Notes and waive the January 31, 2009 put rights for $15,600,000 face amount of 2023 Notes in exchange for a total of $1,844,431 in cash, 8,430,457 shares of its Common Stock and $1.0 million in aggregate principal amount of the 2012 Notes.

*Also during February 2009, the Company repurchased $19,278,000 in aggregate principal amount at maturity of its 2024 Notes from holders of 2024 Notes that had exercised their put rights arising under the indenture governing the 2024 Notes, including $6,504,000 in aggregate principal amount at maturity of 2024 Notes pursuant to certain puts the Company agreed to accept following the initial put period. In consideration for the $19,278,000 in face value of the 2024 Notes, the Company issued 94,269,420 shares of its Common Stock.

Following the closing of the aforementioned exchange transactions and after giving effect to the 2023 Notes and 2024 Notes that were previously acquired by the Company, $21.7 million in aggregate principal amount at maturity of the 2023 Notes and $17.4 million in aggregate principal amount at maturity of the 2024 Notes will remain outstanding. The outstanding 2023 Notes and 2024 Notes may be put to the Company no earlier than June 16, 2013 and February 10, 2014, respectively, under the terms of the Indenture governing such Notes.

The below table summarizes the Company's outstanding convertible notes and outstanding shares before and after the disclosed transactions.

Prior to After All Transactions
Transaction Effective 2/25/09

Face Face Cash Shares
Amount Amount Paid by Issued by
Outstanding Outstanding Mesa Mesa

Senior Notes due $52.1M $21.7M $1.9M 11,864,457
June 2023
Senior Notes due $120.4M $17.4M $4.9M 105,208,170
Feb 2024
New Notes due 0 $17.2M - -
2012
Total $172.5M $56.3M $6.8M 117,072,627

Prior to After All Transactions
Transaction Effective 2/25/09
Total Shares
Outstanding 29,618,160 146,690,787



"We are pleased to have re-established agreements to retire $83.7 million of our 2024 Notes on terms that we believe are favorable to all parties involved and to have completed the restructuring of our 2023 Notes and 2024 Notes. The restructuring of these Notes, together with our return to profitability in the first quarter of fiscal 2009, are critical accomplishments to the long term health and ongoing profitability of the Company," said Jonathan Ornstein, Chairman and CEO of Mesa Air Group, Inc.

This press release contains various forward-looking statements that are based on management's beliefs, as well as assumptions made by and information currently available to management. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable; it can give no assurance that such expectations will prove to have been correct. Such statements are subject to certain risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated, projected or expected.

Mesa currently operates 151 aircraft with over 800 daily system departures to 124 cities, 38 states, the District of Columbia, Canada, the Bahamas and Mexico. Mesa operates as Delta Connection, US Airways Express and United Express under contractual agreements with Delta Air Lines, US Airways and United Airlines, respectively, and independently as Mesa Airlines and go!. In June 2006 Mesa launched inter-island Hawaiian service as go!. This operation links Honolulu to the neighbor island airports of Hilo, Kahului, Kona and Lihue. The Company, founded by Larry and Janie Risley in New Mexico in 1982, has approximately 5,000 employees and was awarded Regional Airline of the Year by Air Transport World magazine in 1992 and 2005.

Website: www.mesa-air.com

SOURCE Mesa Air Group, Inc.