Mesa Air Group Completes Second Closing On Secured Loan Facility, Receiving an Additional $152 Million

Rhea-AI Summary

Mesa Air Group, Inc. (NASDAQ: MESA) has completed a second closing on its five-year Loan and Guarantee Agreement under the CARES Act. The airline borrowed an additional $152 million, following an initial $43 million drawn on October 30, 2020. These funds are designated for general corporate purposes and operating expenses. In connection with the loan, Mesa issued warrants to the U.S. Treasury for 3,819,095 shares of common stock, valid for five years. This funding is intended to support Mesa during the ongoing challenges posed by the pandemic.

Positive

• Completed a second closing borrowing $152 million under the CARES Act loan agreement.
• Funds will support general corporate purposes and operating expenses.

Negative

• Warrants issued to the U.S. Treasury could lead to potential dilution of shares.

PHOENIX, Nov. 16, 2020 (GLOBE NEWSWIRE) -- Mesa Air Group, Inc. (NASDAQ: MESA) today announced that it has completed a second closing through its previously disclosed five-year Loan and Guarantee Agreement under the Coronavirus Air, Relief, and Economic Security Act (CARES Act).

The Loan Agreement provided a secured term loan facility of up to $200 million. On October 30, 2020, Mesa borrowed $43 million under the facility and today, completed a second closing to borrow an additional $152 million. These funds may be used for general corporate purposes and operating expenses, to the extent permitted by the CARES Act.

“I’d like to again express my sincere gratitude to everyone involved in making this deal happen. Our people have been working very hard to ensure Mesa and its employees are prepared to weather this storm”, said Jonathan Ornstein, Chairman and Chief Executive Officer. “These additional funds will substantially benefit our airline and the communities we serve as we continue to navigate the obstacles created by the pandemic”.

In connection with the additional $152 million drawn under the facility, Mesa issued warrants to the U.S. Treasury to purchase 3,819,095 shares of common stock, no par value. The Warrants have a five-year term from the date issued, were issued pursuant to the Warrant Agreement, and have substantially identical terms to the warrants issued on the initial closing.

About Mesa Air Group, Inc.

Headquartered in Phoenix, Arizona, Mesa Air Group, Inc. is the holding company of Mesa Airlines, a regional air carrier providing scheduled passenger service to 101 cities in 39 states, the District of Columbia, Canada and Mexico. As of October 31st, 2020, Mesa operated a fleet of 146 aircraft with approximately 342 daily departures and 3,200 employees. Mesa operates all of its flights as either American Eagle, United Express, or DHL Express flights pursuant to the terms of capacity purchase agreements entered into with American Airlines, Inc., United Airlines, Inc., and DHL.

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about the benefits to Mesa of the additional funds borrowed under the secured term loan facility with the U.S. Treasury and its ability to navigate the obstacles created by the pandemic. All forward-looking statements in this release are made as the date hereof and are based on information available to Mesa as of such date. These forward-looking statements represent the judgment of the Company, as of the date of this release, and the Company disclaims any intent or obligation to publicly update or review any forward-looking statements, whether as a result of new information, future developments or otherwise, except as may be required by any applicable securities laws.

Investor Relations
Brian Gillman
investor@mesa-air.com

Media
Matt Harris
media@mesa-air.com

FAQ

What is the latest funding announcement for Mesa Air Group?

Mesa Air Group announced it borrowed an additional $152 million under the CARES Act loan agreement on November 16, 2020.

How much total funding has Mesa Air Group secured under the CARES Act?

Mesa Air Group has secured a total of $195 million under the CARES Act, including $43 million borrowed on October 30, 2020.

What are the terms of the warrants issued by Mesa Air Group?

Mesa issued warrants to the U.S. Treasury for 3,819,095 shares of common stock, which have a five-year term from the date of issuance.

How will the additional funding benefit Mesa Air Group?

The additional funding is intended to help Mesa navigate the challenges presented by the ongoing pandemic.