SKYWEST,INC. (NASDAQ:SKYW) Files An 8-K Completion of Acquisition or Disposition of Assets

SKYWEST,INC. (NASDAQ:SKYW) Files An 8-K Completion of Acquisition or Disposition of Assets
Item 2.01 Completion of Acquisition or Disposition of Assets.

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On January22, 2019, SkyWest,Inc. (“SkyWest”) completed the previously announced sale of its wholly owned subsidiary ExpressJet Airlines,Inc. (“ExpressJet”). The closing of the transaction was completed in two parts, through an asset sale and stock sale, as further described below.

Asset Sale

On January11, 2019, to the terms and conditions of the Asset Purchase Agreement, dated as of December17, 2018 (the “Asset Purchase Agreement”), by and among SkyWest, ExpressJet and United Airlines,Inc. (“United”), United acquired certain specified assets and liabilities of ExpressJet, including, among other things, aircraft engines, auxiliary power units, rotable spare parts, ground support equipment and flight training equipment for $60 million in cash, subject to certain purchase price adjustments (the “Asset Sale”). Certain assets and liabilities of ExpressJet were expressly excluded from the Asset Sale.

ExpressJet and United agreed to customary representations, warranties and covenants in the Asset Purchase Agreement. Under the Asset Purchase Agreement, SkyWest will indemnify United against damages arising from, among other things, breaches of SkyWest’s or ExpressJet’s representations, warranties or covenants under the Asset Purchase Agreement. The indemnification period generally runs for a period of 12 months from the closing, with longer survival periods for certain specified representations and warranties.

The foregoing description of the Asset Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Asset Purchase Agreement, which is filed as Exhibit2.1 to the Current Report on Form8-K filed by SkyWest with the Securities and Exchange Commission on December18, 2018, and is incorporated herein by reference.

Stock Sale

Additionally, on January22, 2019, to the terms and conditions of the Stock Purchase Agreement, dated as of December17, 2018, by and among SkyWest and ManaAir, LLC, a company in which United owns a minority interest (the “Buyer”), the Buyer acquired all of the outstanding shares of capital stock of ExpressJet from SkyWest for $16 million in cash, subject to certain purchase price adjustments (the “Stock Sale,” and collectively with the Asset Sale, the “ExpressJet Sale”).

To facilitate payment of the purchase price for the Stock Sale and to provide an initial working capital, at the closing of the Stock Sale, SkyWest Leasing,Inc., a wholly-owned subsidiary of SkyWest, loaned $26 million to Kair Enterprises,Inc. (the “Borrower”), the majority owner of the Buyer. Such loan will accrue interest at the rate of 6.85% per annum, mature on the last business day of the last month immediately preceding the two-year anniversary of the closing of the Stock Sale and be secured by, among other things, the Borrower’s ownership interests in the Buyer.

SkyWest and the Buyer agreed to customary representations, warranties and covenants in the Stock Purchase Agreement. Under the Stock Purchase Agreement, SkyWest will indemnify the Buyer against damages arising from, among other things, breaches of SkyWest’s representations, warranties or covenants under the Stock Purchase Agreement. The indemnification period generally runs for a period of 12 months from the closing, with longer survival periods for certain specified representations and warranties.

The foregoing description of the Stock Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Stock Purchase Agreement, which is filed as Exhibit2.2 to the Current Report on Form8-K filed by SkyWest with the Securities and Exchange Commission on December18, 2018, and is incorporated herein by reference.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

In connection with the completion of the ExpressJet Sale, as of January22, 2019, Terry M. Vais ceased serving as the Chief Operating Officer of ExpressJet and transitioned into an operations role with SkyWest.

Item 9.01 Financial Statements and Exhibits.

(b) Pro Forma Financial Information.

The Unaudited Pro Forma Consolidated Statements of Operations of SkyWest for the nine months ended September30, 2018 and for the fiscal year ended December31, 2017, assuming the ExpressJet Sale occurred at the beginning of those periods, the Unaudited Pro Forma Consolidated Balance Sheet of SkyWest as of September30, 2018, assuming that the ExpressJet Sale occurred as of that date, and the related Notes to the Unaudited Pro Forma Consolidated Financial Information are being filed as Exhibit99.1 to this Current Report on Form8-K and are incorporated herein by reference.

(d) Exhibits.

SKYWEST INC Exhibit
EX-99.1 2 a19-3151_1ex99d1.htm EX-99.1 Exhibit 99.1   UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION   SKYWEST,…
To view the full exhibit click here

About SKYWEST,INC. (NASDAQ:SKYW)

Skywest, Inc. is a holding company for approximately two scheduled passenger airline operations and an aircraft leasing company. The Company operates through two segments: SkyWest Airlines and ExpressJet. SkyWest Airlines provides regional jet and turboprop service to airports located in the Midwestern and Western United States. ExpressJet provides regional jet service in the Eastern United States, from airports located in Atlanta, Cleveland, Chicago (O’Hare), Houston, Detroit, Memphis, Newark and Minneapolis, as well as Mexico and Canada. The Company, through its subsidiaries, SkyWest Airlines, Inc. (SkyWest Airlines) and ExpressJet Airlines, Inc. (ExpressJet), offers scheduled passenger service with approximately 3,400 daily departures to destinations in the United States, Canada, Mexico and the Caribbean. Its consolidated fleet consists of a total of approximately 700 aircrafts, including over 360 United fleet, over 230 Delta fleet, over 50 American fleet and over 10 Alaska fleet.

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