Monday February 28, 3:15 pm ET
Airline Secures Access to $125 Million Loan That Will Convert to Equity Upon Emergence from Chapter 11 This Summer
ARLINGTON, Va., Feb. 28 /PRNewswire-FirstCall/ -- US Airways Group, Inc.'s $125 million financing agreement with Eastshore Aviation, LLC, an investment entity owned by Air Wisconsin Airlines Corp. shareholders and Air Wisconsin Airlines Corp., was approved by the U.S. Bankruptcy Court today.
The $125 million facility is structured as a debtor-in-possession (DIP) term loan, to be drawn in the amount of $75 million (immediately) and two subsequent $25 million increments. This loan would be second only to the Air Transportation Stabilization Board loan with regard to the company's assets that are pledged as collateral. Upon emergence from Chapter 11, the $125 million financing package would then convert to equity in the reorganized US Airways.
Air Wisconsin, based in Appleton, Wis., is the nation's largest privately held regional airline. In 2004, its 87 all-jet fleet generated approximately $700 million in revenue and flew more than 7 million passengers under the United Express brand. As part of this agreement, US Airways and Air Wisconsin will enter into an air services agreement under which Air Wisconsin may, but is not required to, provide regional jet service under the US Airways Express brand. Air Wisconsin's arrangements with United Airlines are unaffected by this agreement with US Airways.
"The announcement of this agreement ten days ago has generated enormous enthusiasm within the company and in the marketplace," said Bruce R. Lakefield, US Airways president and chief executive officer. "Eastshore's commitment and the potential for an expanded relationship with Air Wisconsin has been a significant boost to our restructuring as we work to complete a plan of reorganization to present to creditors and the court."
"US Airways' management team and its employees have kept their focus on accomplishing the tasks required for a successful restructuring. The support of this agreement by the creditors and the approval by the court is another confidence builder and reaffirms our decision to partner with US Airways," said Eastshore principal Richard Bartlett.
Airline Secures Access to $125 Million Loan That Will Convert to Equity Upon Emergence from Chapter 11 This Summer
ARLINGTON, Va., Feb. 28 /PRNewswire-FirstCall/ -- US Airways Group, Inc.'s $125 million financing agreement with Eastshore Aviation, LLC, an investment entity owned by Air Wisconsin Airlines Corp. shareholders and Air Wisconsin Airlines Corp., was approved by the U.S. Bankruptcy Court today.
The $125 million facility is structured as a debtor-in-possession (DIP) term loan, to be drawn in the amount of $75 million (immediately) and two subsequent $25 million increments. This loan would be second only to the Air Transportation Stabilization Board loan with regard to the company's assets that are pledged as collateral. Upon emergence from Chapter 11, the $125 million financing package would then convert to equity in the reorganized US Airways.Air Wisconsin, based in Appleton, Wis., is the nation's largest privately held regional airline. In 2004, its 87 all-jet fleet generated approximately $700 million in revenue and flew more than 7 million passengers under the United Express brand. As part of this agreement, US Airways and Air Wisconsin will enter into an air services agreement under which Air Wisconsin may, but is not required to, provide regional jet service under the US Airways Express brand. Air Wisconsin's arrangements with United Airlines are unaffected by this agreement with US Airways.
"The announcement of this agreement ten days ago has generated enormous enthusiasm within the company and in the marketplace," said Bruce R. Lakefield, US Airways president and chief executive officer. "Eastshore's commitment and the potential for an expanded relationship with Air Wisconsin has been a significant boost to our restructuring as we work to complete a plan of reorganization to present to creditors and the court."
"US Airways' management team and its employees have kept their focus on accomplishing the tasks required for a successful restructuring. The support of this agreement by the creditors and the approval by the court is another confidence builder and reaffirms our decision to partner with US Airways," said Eastshore principal Richard Bartlett.
