Las Vegas-based Allegiant Travel Company announced Tuesday an agreement with the Department of the Treasury to receive $171.9 million in emergency relief under the Coronavirus Aid, Relief and Economic Security (CARES) Act. The Payroll Support Program (PSP) funds are targeted to support team member salaries and benefits for Allegiant's 4,500-member workforce.
The PSP is expected to provide Allegiant with $171.9 million in funding and will cover approximately 76 percent of budgeted payroll and benefit costs through September 30. Of that funding, $21 million will be in the form of a 10-year term, low-interest loan, to be repaid at any time prior to maturity at par. Under the loan, the company will issue warrants to the U.S. Department of the Treasury to purchase 25,890 shares of common stock with a cash settlement right at the company's option.
Allegiant says more than 1,100 team members, 25 percent of the workforce, are already participating in a voluntary short-term leave program or voluntary pay reductions.