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Mesa has news today about 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have terms that are substantially similar to former agreements with the same holders of 2024 Notes that were previously rescinded.
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
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