SkyWest closes $ 573 million secured loan facility under the CARES Act
ST. GEORGE, Utah, September 29, 2020 / PRNewswire / – SkyWest, Inc. (NASDAQ: SKYW) (“SkyWest”) today announced that it and its wholly-owned subsidiary SkyWest Airlines, Inc. have entered into a five-year loan and guarantee agreement with the US Department of the Treasury, which provides SkyWest Airlines with a secured term loan facility to borrow up to $ 573 million under the Coronavirus Help, Relief and Economic Security Act (CARES Act). At September 29, 2020, when entering into the loan agreement, SkyWest Airlines borrowed $ 60 million under the installation and until March 26, 2021 to determine whether it will borrow additional amounts in up to two subsequent borrowings.
The interest rate under the secured term loan facility is LIBOR plus 3.0% without amortization. In consideration for the loan, SkyWest is required to issue warrants to the US Department of the Treasury to purchase common shares based on and in connection with amounts drawn on the secured term loan facility. As part of the first $ 60 million drawdown under the facility, SkyWest issued warrants to purchase 211,416 common shares at an exercise price of $ 28.38 per share.
The loan and guarantee agreement also includes certain restrictions, including restrictions on the payment of dividends and the redemption of SkyWest shares. The secured loan is secured by airplane engines and airplane parts.
SkyWest, Inc. is the holding company of SkyWest Airlines and SkyWest Leasing, an aircraft leasing company. SkyWest Airlines has a fleet of nearly 500 aircraft connecting passengers to more than 250 destinations across North America. SkyWest Airlines operates through partnerships with United Airlines, Delta Air Lines, American Airlines and Alaska Airlines carrying more than 43 million passengers in 2019.
In addition to historical information, this press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “forecasts”, “expects”, “intends”, “believes”, “ anticipates “, estimates,” “should”, “probable” and similar expressions identify forward-looking statements. Such statements include, but are not limited to, statements about the conditions, timing and expected benefits of the facility. term loan guaranteed under the CARES Act, the impact of the COVID-19 outbreak on SkyWest’s business, financial condition and results of operations, as well as SkyWest’s future financial and operational results, plans, objectives, expectations, estimates, intentions and prospects, and other statements that are not historical facts. All forward-looking statements included in this press release are made as of the date hereof and are based on the information available to SkyWest on that date. SkyWest assumes no obligation to update any forward-looking statements for any reason. Readers should note that many factors could affect SkyWest’s future operating and financial results and could cause actual results to differ materially from those expressed in the forward-looking statements set forth in this press release. These factors include, but are not limited to, uncertainties regarding the impact of the secured term loan facility on SkyWest’s business and operations, the consequences of the COVID-19 outbreak on economic conditions, the travel industry and our main partners in general and the financial sector. the condition and results of operations of SkyWest in particular, the prospects of entering into agreements with existing carriers or others to fly new aircraft, the ongoing negotiations between SkyWest and its major partners regarding their contractual obligations, uncertainties regarding the operation of new aircraft, the ability to attract and retain qualified pilots, the impact of regulatory issues such as pilot rest rules and qualification requirements, and the ability to secure funding for them. aircraft.
SkyWest’s actual operational and financial results are also likely to vary, and may vary significantly, from those expected, estimated, projected or expected for a number of other reasons, including, in addition to those identified above: the global pandemic current COVID-19 and outbreak of any other disease or similar public health threat that affects travel demand or travel behavior; the challenges of successful competition in a highly competitive and rapidly changing industry; developments associated with fluctuations in the economy and demand for air travel, including related to the duration and impact of the COVID-19 pandemic, and the associated decline in customer demand and spending; the financial stability of SkyWest’s major partners and any potential impact of their financial condition on SkyWest’s operations; fluctuations in flight schedules, which are determined by the major partners for which SkyWest conducts flight operations; variations in market and economic conditions; significant aircraft lease and debt commitments; estimated useful lives of long-lived assets, residual values of aircraft and related impairment charges; labor relations and costs; the impact of global instability; rapid fluctuations in fuel costs and potential fuel shortages; the impact of weather or other natural disasters on air travel and airline costs; aircraft deliveries; and other unforeseen factors. The risk factors, cautions and other conditions that could cause SkyWest’s actual results to differ materially from management’s current expectations are contained in the documents filed by SkyWest with the Securities and Exchange Commission, including its latest annual report on Form 10-K, quarterly reports on Form 10 -Q and current reports on Form 8-K.
SOURCE SkyWest, Inc.