Mesa Air looks to nix exchange agreement with 3.625% convertible holders

By Angela McDaniels

Tacoma, Wash., Feb. 9 - Mesa Air Group, Inc. is seeking to rescind the exchange agreements it reached with some holders of its 3.625% senior convertible notes due 2024 in January due to a recent regulatory inquiry, according to a company news release.

As a result, the holders will regain their put rights.

The convertibles are putable on Tuesday at a price of $583.40 per $1,000 principal amount at maturity.

As previously reported, holders had agreed to exchange $70.9 million principal amount at maturity of the 3.625% convertibles in exchange for cash, shares of common stock and new 8% senior unsecured notes due 2012. A similar agreement was reached with some holders of the company' 6.25% senior convertibles due 2023.

The company said it may not resume discussions with the convertible holders until Wednesday, and it gave no assurances that it will be able to enter into new agreements with the holders on similar terms, that holders won't exercise their put rights or that the holders won't dispute the company's right to rescind the exchange agreements.

Mesa Air is a Phoenix-based provider of passenger and airfreight services.

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