SkyWest Inc. (NASDAQ: SKYW) has revealed that its subsidiary SkyWest Airlines has signed a ‘Payroll Support Program Extension’ deal with US Treasury Department. Under the terms of the Agreement, SkyWest will get nearly $233 million following the ‘Consolidated Appropriations Act of 2021.’ The firm has been awarded $116.5 million and the firm will be awarded the remaining $116.5 million in February 2021.
SkyWest Inc. is planning to use the proceeds from the payroll deal for fulfilling the expenses of the firm. It has disclosed that to pay the wages, pensions, and allowances of many SkyWest Airlines workers, the funds earned following this Payroll Support Program will be used.
As per this deal, nearly $40 million will be in the form of a low-interest unsecured term loan for 10 years. Moreover, SkyWest will offer to the U.S. The Treasury Department permits to buy nearly 98,815 SkyWest common shares at a $40.41 strike price.
Furthermore, this deal involves some constraints akin to the original Payroll Accord. The first provision includes the limitations on spontaneous executions and layoffs until March 31, 2021. Secondly, until March 31, 2022, constraints on the payment of dividends & the repurchase of shares. Thirdly, the return of unwillingly fired or lay off workers after Sept. 30 with pay from Dec. 1, 2020, to March 31, 2021. Lastly, some constraints on executive reimbursement through October 1, 2022.
Shares of SkyWest Inc. (NASDAQ: SKYW) traded down 3.87% during the trading session of Friday. The firm has recorded a trading volume of 239.21K as compared to the average volume of 436.77K. SkyWest Inc.'s share fluctuated between the 52-weeks low and high range of $10.58 and $66.52, respectively. Its share has surged 294.80% from its 52-weeks low and plunged -37.21% from its 52-weeks high. SKYW has a total market capitalization of $2.11 billion at the time of writing.
SKYW has also disclosed that its unit SkyWest Airlines has signed another contract with the U.S. Treasury Department. The new deal has increased the deadline to May 28, 2021, from May 26, 2021. There have been no changes to the other provisions of the credit and guarantee contract and remain in place.