Having filed a registration statement outlining its intention to pursue an Initial Public Offering (IPO), Frontier Airlines (F9, Denver International) parent Frontier Airlines Holdings has now set out the terms for the measure, with plans to offer 30 million shares whose price is currently expected to be between USD19 and USD21 each. It intends to list its common stock on the Nasdaq Global Select Market under the ticker symbol ULCC.
The offering consists of 15 million shares offered by Frontier and 15 million shares to be sold “by certain of Frontier’s existing stockholders,” it said in the disclosure on March 23.
Frontier is scheduled to price its IPO on March 31 and start trading the next day, a source close to the matter told the Dow Jones weekly magazine Barron’s. As set out in the earlier regulatory filing on March 8, as many as 11 banks are underwriting the deal, led by Barclays, Citigroup, Deutsche Bank Securities, Evercore ISI, and Morgan Stanley.
“We estimate that we will receive net proceeds from this offering of approximately USD276 million based on an assumed initial public offering price of USD20.00 per share [...] and after deducting estimated underwriting discounts and estimated expenses of this offering payable by us,” a prospectus accompanying the group’s statement said.
These proceeds, it added, would be used for general corporate purposes including cash reserves, working capital, capital expenditures such as flight equipment acquisitions, sales and marketing activities, general and administrative matters, and to pay down debt.
Frontier posted a net loss of USD225 million for 2020, in contrast with a net profit of USD250 million in 2019. Operating revenue fell to USD1.25 billion last year from USD2.51 billion in 2019.
The listing announcement came just weeks after Sun Country Airlines (SY, Minneapolis St. Paul International) conducted a successful IPO in which it raised USD218 million, a sum it plans to invest in expanding its fleet and workforce ahead of an anticipated rebound in leisure travel.
