=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SFGate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/2004/02/23/f= inancial2000EST0363.DTL ---------------------------------------------------------------------- Monday, February 23, 2004 (AP) Spirit Airlines sells controlling stake to fund for $125 million JOHN PAIN, AP Business Writer (02-23) 18:17 PST MIAMI (AP) -- Spirit Airlines sold a controlling stake in the company to a Los Angeles venture capital fund for $125 million and planned to use the proceeds to double its fleet over the next five years, the low-cost carrier's chief executive said Monday. The deal to sell most of the Miramar-based airline to Oaktree Capital Management LLC closed late Friday, Spirit CEO and President Jacob M. Schorr said in a phone interview. The sale has been under negotiation for more than nine months and officials said earlier this month a deal with Oaktree was in the works. The low-cost carrier plans to use the money to retire its current fleet = of 31 MD-80s and buy about 60 new planes over the next five years, Schorr said. Schorr said he expected to announce aircraft orders within 90 days. Schorr will retain his current positions and add the title of chairman, replacing Spirit founder Ned Homefeld. Schorr, Homefeld and former chief operating officer Mark S. Kahan will continue as minority owners. Low-cost airlines having been gaining ground on major carriers by luring passengers with discounts fares at less-congested airports. Many are much more profitable than big airlines. Privately held Spirit had an operating profit of $26 million last year, a 12 percent increase from 2002, Schorr said. "I think Spirit is very well positioned against its competitors in the low-cost carrier segment of the industry," Schorr said Ray Neidl, an analyst with New York investment firm Blaylock & Partners, agreed. He said the capital injection should help Spirit compete better against JetBlue Airways and AirTran Airways, which both have more modern planes. "They got all the money they needed and a little bit more probably," Nei= dl said. He also said the cash should be a boost for Spirit as the airline indust= ry continues to recover from the Sept., 11, 2001, terrorist attacks and war in Iraq. Oaktree is a venture capital company with $26 billion in assets, accordi= ng to its Web site. Oaktree and a partner invested $37 million in US Airways as the carrier emerged from bankruptcy last August. Spirit is a discount airline that makes 116 daily flight departures to 16 destinations, including Fort Lauderdale, Orlando, Tampa, West Palm Beach, Fort Myers, Chicago, Denver, Los Angeles, New York and Detroit. It has applied to the U.S. government to add about 10 new destinations in Latin America and the Caribbean. The discount airline began in 1980 as Charter One, a Detroit-based chart= er tour operator, and changed its name to Spirit Airlines in 1992. On the Net: Spirit Airline: www.spiritair.com Oaktree Capital Management: www.oaktreecapital.com ---------------------------------------------------------------------- Copyright 2004 AP