Frontier Airlines Holdings, trying desperately to emerge from bankruptcy, said it prefers an investment plan received from a second group of investors. On Monday, the airline said it is moving forward with an alternate transaction for post-petition debtor-in-possession (DIP) financing offered by a group of unsecured creditors that includes Republic Airways Holdings, Credit Suisse Securities, and AQR Capital.

The trio is offering Frontier up to $75 million in DIP financing, with an immediate firm commitment of $30 million. “This new DIP facility provides Frontier with lower financing costs, less restrictive covenants and greater flexibility to pursue strategic opportunities without being constrained by more restrictive DIP provisions,” the company said in a press release.

The alternate DIP facility is subject to bankruptcy court approval and to various conditions.

Last week, Frontier announced it had received a $75 million commitment in DIP financing from Perseus LLC, a private investment firm. Under its plan, Perseus would also purchase about 80 percent of the equity in the reorganized company for $100 million.

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The agreement hammered out by members of Frontier’s unsecured creditors committee “is a tremendous vote of confidence in our company and its business plan,” said Sean Menke, Frontier president and chief executive officer. “After a careful examination of this offer against the offer Perseus provided last week, we believe this new agreement offers immediate access to greater liquidity under more favorable terms.”

Last week, Frontier also announced a sale lease-back deal involving six of its 47 Airbus A319 aircraft. Frontier and its subsidiaries filed for reorganization under Chapter 11 on April 10, 2008.

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