Sale of ASA
On August 15, 2005, we entered into a definitive agreement (“Stock Purchase Agreementâ€) to sell ASA, our wholly owned subsidiary, to SkyWest, Inc. (“SkyWestâ€) for a purchase price of $425 million. Under the terms of the Stock Purchase Agreement, SkyWest will purchase 100% of the outstanding shares of ASA. We will receive $350 million at the closing of this transaction, representing $330 million of purchase price and $20 million related to aircraft deposits. We will also receive $125 million, consisting of $95 million of deferred purchase price and $30 million in certain aircraft deposits, upon the earlier of the fourth anniversary of the closing of this transaction or, in the event we seek to restructure under Chapter 11 of the U.S. Bankruptcy Code, assumption by us of our contract carrier agreements with ASA and SkyWest Airlines, Inc. (“SkyWest Airlinesâ€), a wholly owned subsidiary of SkyWest. SkyWest shall be entitled to retain $125 million if we reject our contract carrier agreement with either ASA or SkyWest Airlines in a Chapter 11 proceeding prior to the fourth anniversary of the closing of this transaction. The purchase price is also subject to a working capital adjustment. The closing under the Stock Purchase Agreement is expected to occur in September 2005 and is subject to certain conditions, including expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and receipt of an exemption or order from the U.S. Department of Transportation relating to the transfer of certain international routes. Pursuant to our financing agreements with GE Commercial Finance and other lenders (“GE Commercial Finance Facilityâ€), we are required to repay $100 million of the outstanding borrowings under that facility upon closing of this transaction.
