SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
June 10, 2011
Date of report (Date of earliest event reported)
Great Lakes Aviation, Ltd.
(Exact name of registrant as specified in its charter)
1022 Airport Parkway
Cheyenne, WY 82001
(Address of principal executive offices, including zip code)
(Registrants telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2):
On June 10, 2011, Great Lakes Aviation, Ltd. (the Company) and Raytheon Aircraft Credit Corporation (Raytheon) entered into an agreement (the Agreement) extending the balloon payment due to Raytheon on the aircraft notes, as discussed below, from June 30, 2011 to August 31, 2011. Under the Agreement, the Company will amend each of the aircraft notes to provide that it will make payments on or before June 30, 2011, July 30, 2011 and August 30, 2011, and pay all remaining amounts outstanding, including all principal and accrued interest, on August 31, 2011. Assuming no prepayment, this balloon payment would total $31.8 million. The Company paid Raytheon an extension fee of $100,000 upon entry into the Agreement. The Company also agreed to pay Raytheons reasonable costs and expenses and to file a post-effective amendment to its registration statement on Form S-1 registering Raytheons shares for resale within five business days.
Raytheon is the Companys primary creditor and single largest shareholder. The aircraft debt with Raytheon consists of 25 promissory notes (the aircraft notes), which were used to finance the purchase of aircraft and are secured by 25 Beechcraft 1900D aircraft. A balloon payment for all 25 aircraft notes is due upon maturity of the notes, which was extended by the Agreement until August 31, 2011. The Companys senior note with Raytheon, in the amount of $7.2 million at March 31, 2011, is cross defaulted to the aircraft notes. The senior note is secured by four Embraer Brasalia aircraft as well as all other assets of the Company. The Company also leases seven aircraft from Raytheon, on which Raytheon has given the Company notice of lease terminations beginning in August 2011. The Agreement provides that, in addition to an event of default as defined in the aircraft notes or the senior note, any breach of the Agreement shall constitute an event of default under the aircraft notes, the senior note, and the aircraft leases. Other than as set forth in the Agreement, the aircraft notes and the senior note remain in effect, and the status of the aircraft leases are not affected. The foregoing summary is not complete and is qualified in its entirety by reference to the Agreement, which is attached hereto as Exhibit 10.1.
In order to satisfy its obligations to Raytheon now due August 31, 2011, the Company will need to generate sufficient cash from operations to repay the obligation, secure alternative sources of financing, raise additional capital, refinance the obligation, or achieve a combination of any or all of the foregoing to satisfy the terms of the aircraft notes. As previously reported in the Companys Form 10-Q filed May 10, 2011, it is managements plan to obtain new financing with a different lender, and the Company has retained Raymond James & Associates, Inc. to act as its external investment banking advisor in attracting new financing and optimizing the repayment terms of the debt related to the aircraft notes. Furthermore, it is managements intention to continue the operations of the business in the normal course.
See Exhibit Index.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.