Jul 21, 2006 2:11 pm US/Central
Sun Country Airlines Sold To Tom Petters' Group
Minneapolis (AP) ―
Sun Country Airlines said on Friday that its investors are selling the small carrier to an investor group led by businessman Tom Petters.
The board of directors of the low-fare carrier approved the sale during a meeting in Minneapolis on Thursday, Chief Executive Shaun Nugent said. Terms of the deal were not disclosed.
Nugent said the new investors are acquiring a 100 percent interest in the company. The sale will allow Sun Country to recapitalize the business and expand, he said.
Sun Country said the new owner will be Petters Aviation, a subsidiary of PGW and Whitebox Advisors, a private equity group in the Twin Cities.
The deal is subject to approval by federal regulators, a process Petters estimated will take 30 to 60 days.
About 1.6 million passengers flew on Sun Country last year, when the Mendota Heights-based carrier lost $11 million on revenue of $204 million.
"I have every intention to keep the operating company together with the same management team that has taken it this far," Nugent said on Thursday.
Sun Country emerged from bankruptcy in early 2002. Nugent said the airline has been successful because of its employees' customer service and low fares on new Boeing 737-800s.
"This airline has been doing well," Petters said. "We think it is the best-kept secret in Minnesota."
"The airline business is extremely capital-intensive," Nugent said. "We determined that aligning with the Tom Petters investment group provides the greatest amount of capital and creativity that will allow us to execute our (business) plan."
Petters heads Minnetonka-based Petters Group Worldwide, whose holdings include retail and wholesale companies operating in the United States, Asia, Europe and South America. It's investments include Fingerhut, Polaroid and Sunbeam.
Petters entered into a conditional agreement to "recapitalize" Sun Country in January, subject to completion of a due diligence review of the privately held airline.
Sun Country executives decided at the end of last year that they wanted to raise $15 million to expand the airline.
Sun Country serves more than two dozen cities and employed 700 people as of late 2005.
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Sun Country Airlines started operating in 1982, with 33 employees.
(© 2009 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)
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