SEC Form SC 13D filed by Mesa Air Group Inc.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No. )*

(Title of Class of Securities)

(CUSIP Number)

233 South Wacker Drive

Chicago, Illinois 60606

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. ☐

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits.  See Rule 13d-7 for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter the disclosures provided in a prior cover page.

The information required in the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

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1.

This percentage is based on a total of 36,378,550 Shares (as defined herein) outstanding as of January 3, 2023, as reported by the Issuer in its definitive proxy statement on Schedule 14A, filed with the SEC (as defined herein) on January 11, 2023, plus 4,042,061 Shares issued to United Airlines, Inc. on January 13, 2023.

Item 1.

Security and Issuer

Item 2.

Identity and Background

-

United Airlines Holdings, Inc. (“UAL”), and

-

United Airlines, Inc. (“United”).

Item 3.

Source and Amount of Funds or Other Consideration

On December 27, 2022, Mesa Airlines, Inc. (“Mesa”), a wholly-owned subsidiary of the Issuer, entered into the Third Amended and Restated Capacity Purchase Agreement (the “CPA”) with United, which is filed as Exhibit 99.2 hereto. The CPA provides for, among other things, certain amended terms regarding the contractor services that Mesa provides to United.  In addition, United assumed all of CIT Bank’s (“CIT”) rights and obligations under Mesa’s and Mesa Air Group Airline Inventory Management, L.L.C.’s existing Credit and Guaranty Agreement with CIT, which is guaranteed by the Issuer (the “Existing Agreement” and, as amended and assumed by United, the “Amended Credit Facility”), including (i) extending the Revolving Loan Maturity Date (as defined in the Amended Credit Facility) from the earlier to occur of November 30, 2028 or the date of the termination of the CPA; (ii) provide for a revolving loan of $10.0 million plus certain other fees (the “Effective Date Bridge Loan”), which will be due and payable on January 31, 2024, subject to certain mandatory prepayment requirements; (iii) provide for Revolving Commitments (as defined in the Amended Credit Facility) equal to $30.7 million (inclusive of the amount outstanding under such facility as of the effective date of the Assignment) plus the original principal amount of the Effective Date Bridge Loan; (iv) amortization of the obligations outstanding under the Existing Agreement commencing the last business day of each fiscal quarter commencing the fiscal quarter ending March 31, 2025; and (v) a covenant capping Restricted Payments (as defined in the Amended Credit Facility) at $5.0 million per fiscal year, a consolidated interest and rental coverage ratio of 1.00 to 1.00 covenant, measured at the end of each fiscal quarter, and a Liquidity (as defined in the Amended Credit Facility) requirement of not less than $15.0 million at close of any business day.

As a material inducement for United entering into the CPA and providing the revolving line of credit, the Issuer agreed to take the following steps:  (i) issue to United Shares equal to approximately 10.0% of the total Shares outstanding, calculated on a fully diluted basis immediately after such issuance, pursuant to an Equity Purchase Agreement (defined below); and (ii) grant United the right to designate one individual (the “United Designee”) to be appointed to the board of directors (the “Board”) of the Issuer and the Board of Mesa, which right shall terminate at such time as United’s equity ownership in the Issuer falls below 5.0%.

The issuance of such Shares to United by the Issuer was expected, pursuant to the CPA, to be pursuant to a definitive agreement by and between United and the Issuer including customary representations, warranties, covenants and indemnities for such a transaction (the “Equity Purchase Agreement”).  In addition, pursuant to the CPA, the Issuer agreed to cause to be granted to United pro rata preemptive rights relating to the issuance of any equity securities that the Issuer may propose to issue or sell to any person in the future (the “Preemptive Rights”), and the Issuer agreed to grant to United customary demand and piggyback registration rights in respect of publicly registered offerings of the Issuer, subject to usual and customary exceptions and limitations (the “Registration Rights Agreement”).

On January 13, 2023, the Issuer issued to United 4,042,061 Shares, equal to approximately (and slightly less than) 10.0% of the Issuer’s total Shares outstanding, calculated on a fully diluted basis immediately after such issuance.  The Reporting Persons will file an amendment to this Schedule 13D promptly after the Equity Purchase Agreement and Registration Rights Agreement are effective.

Item 4.

Purpose of Transaction

The Reporting Persons hold their securities of the Issuer for investment purposes.  Pursuant to the CPA and the amended bylaws of the Issuer, United has the right to designate a United Designee to the Issuer’s Board and to Mesa’s Board, subject to the approval of the Issuer’s Board, such approval not to be unreasonably withheld, conditioned or delayed.  The Reporting Persons may also engage in communications with the directors on each Board, members of management of each of the Issuer and Mesa, other shareholders, financial and legal advisers and other parties regarding the Issuer and Mesa, including but not limited to each company’s operations, governance and control.

The Reporting Persons expect to review from time to time their investment in the Issuer and may, depending on the market and other conditions and subject to applicable law: (i) acquire beneficial ownership of additional Shares in the open market, in privately negotiated transactions or otherwise; (ii) dispose of all or part of their holdings of securities of the Issuer; or (iii) take other actions which could involve one or more of the types of transactions or have one or more of the results described in Item 4 of Schedule 13D.

Item 5.

Interest in Securities of the Issuer

(a, b) As of the date hereof, each of the Reporting Persons may be deemed to own 4,042,061 Shares, which represents approximately 9.9999998% of the Shares outstanding.

The foregoing beneficial ownership percentage is based on a total of 36,378,550 Shares outstanding as of January 3, 2023, as reported by the Issuer in its definitive proxy statement on Schedule 14A, filed with the U.S. Securities and Exchange Commission (“SEC”) on January 11, 2023, plus 4,042,061 Shares issued to United on January 13, 2023.

As the holding company of United, UAL shares with United the power to vote or direct the vote, and the power to dispose or direct the disposition of, 4,042,061 Shares directly held by United.

(c) The disclosure in Item 3 of this Schedule 13D is incorporated by reference into this Item 5(c).  Except as set forth in this Schedule 13D, no transactions in the Shares have been effected by the Reporting Persons within the past 60 days.

(d) Except as set forth in this Schedule 13D, to the knowledge of the Reporting Persons, no other person had the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Shares covered by this Schedule 13D.

(e) Not applicable.

Item 6.

Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.

The disclosure in Item 3 and Item 4 of this Schedule 13D is incorporated by reference into this Item 6.

The Reporting Persons are filing this Schedule 13D jointly pursuant to a joint filing agreement under Rule 13d-1(k) under the Act, a copy of which is filed as Exhibit 99.1 to this Schedule 13D.

Except as otherwise set forth in this Schedule 13D, there are no contracts, arrangements, understandings or relationships between the Reporting Persons and any other person with respect to any securities of the Issuer.

Item 7.

Material to be Filed as Exhibits

Exhibit 99.1*	Joint Filing Agreement, dated as of January 23, 2023, between UAL and United.
*Filed herewith

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Attention: Intentional misstatements or omissions of fact constitute federal violations (see 18 U.S.C. 1001).

Name and Position	Present Principal Occupation or Employment
Edward M. Philip Chairman and Independent Director	Former Chief Operating Officer, Partners in Health
Carolyn Corvi Independent Director	Former Vice President and General Manager, The Boeing Company
Matthew Friend Independent Director	Executive Vice President and Chief Financial Officer, NIKE, Inc.
Barney Harford1 Independent Director	Former Chief Operating Officer, Uber Technologies, Inc.
Michele J. Hooper Independent Director	President and Chief Executive Officer, The Directors’ Council
Walter Isaacson Independent Director	Advisory Partner, Perella Weinberg Partners
Richard Johnsen Director	Chief of Staff to the International President, International Association of Machinists and Aerospace Workers
James A. C. Kennedy Independent Director	Former President and Chief Executive Officer, T. Rowe Price Group, Inc.
Scott Kirby Director and Chief Executive Officer	Chief Executive Officer, United Airlines Holdings, Inc.
Edward L. Shapiro Independent Director	Former Managing Partner, PAR Capital Management, Inc.
Laysha Ward Independent Director	Executive Vice President, Chief External Engagement Officer, Target Corporation
James M. Whitehurst Independent Director	Senior Advisor, International Business Machines Corporation

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Name and Position	Present Principal Occupation or Employment
Brett J. Hart Director	President
Scott Kirby Director	Chief Executive Officer
Gerald Laderman Director	Executive Vice President and Chief Financial Officer

Name	Title
Scott Kirby	Chief Executive Officer
Brett J. Hart	President
Torbjorn (Toby) J. Enqvist	Executive Vice President and Chief Operations Officer
Kate Gebo	Executive Vice President Human Resources and Labor Relations
Gregory L. Hart	Executive Vice President and Chief Growth Officer
Linda P. Jojo	Executive Vice President and Chief Customer Officer
Gerald Laderman	Executive Vice President and Chief Financial Officer
Andrew Nocella	Executive Vice President and Chief Commercial Officer
Jonathan Roitman	Executive Vice President and Special Advisor

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