Mesa Air Group enters into an Amendment to its Loan Agreement with the United States Treasury and Provides Update to its Pending Merger with Republic Airways

Core Viewpoint Mesa Air Group has announced significant updates regarding its loan agreement and merger with Republic Airways, which are expected to enhance its financial position and operational capabilities. Loan Agreement Update - Mesa Air Group has entered into an Amendment to its Loan and Guarantee Agreement, extending the maturity date from October 30, 2025, to November 28, 2025, with a further right to extend by 30 days [4] - The interest rate under the Loan Agreement has been reduced to zero percent for 90 days from the date of the Amendment [4] - The principal amount of the obligations under the Loan Agreement will be reduced by $12.3 million, subject to full payment on the maturity date [4] - Mesa Airlines has deposited cash and pledged an aircraft engine as collateral for the obligations under the Loan Agreement [2] Merger Update - Mesa and Republic Airways announced a definitive agreement to merge, creating a leading publicly-traded regional airline company [3] - The combined company is expected to have a twelve-month run-rate annual revenue between approximately $1.8 billion to $2.0 billion [5] - Republic generated approximately $169 million in adjusted EBITDA, while Mesa generated $14 million in adjusted EBITDA for the first half of 2025, totaling $183 million [5] - The pro forma cash and debt balances of the combined company post-merger are anticipated to exceed $300 million and approximately $1.1 billion, respectively, with Mesa contributing no debt [5][6] Shareholder Information - Pre-merger Mesa shareholders will own between 6% and 12% of the combined company, depending on the allocation of Escrow Shares and the determination of the Net Debt Amount [7] - The value of the Escrow Shares will be based on the combined company's 20-trading day average share price ending 60 calendar days after the merger closing [7] Financial Performance and NOL - As of June 30, 2025, Mesa had aggregate federal and state net operating losses (NOLs) of approximately $277.6 million and $150.6 million, which will be credited toward the Net Debt Amount calculation at the merger closing [8] - The share price of Mesa common stock at the merger closing will significantly impact the value received for the NOL [9] Company Overview - Mesa Air Group, headquartered in Phoenix, Arizona, operates as a regional air carrier providing scheduled passenger service to 79 cities in 31 states, Cuba, and Mexico [9] - As of September 30, 2025, Mesa operated a fleet of 60 Embraer 175 regional aircraft, with approximately 254 daily departures [9]