Us Airways Strategic Analysis

[vc10]

It's not unusual for DIP providers to also take a company of Ch 11. RSA did it with US Airways in the first Ch 11.

The AWAC money is not exit financing, it is a DIP loan, go read the agreement, if US does not pay it back it converts to equity. See if it was true exit financing, US would not have acsess to it until they actually EXIT bankruptcy.

And no one sees RSA, GE, RJ companies nor EDS knocking down US' door to give it money.

US is dying a slow death, get ready to feel some more pain.

[post="255365"][/post]​

 

[700UW]

UAL DIP financiers are not taking equity in the company.

 

[BoeingBoy]

Jim

So this by 320 quote below was complete fabrication?

""During last week's ALPA MEC meeting Lakefield told us that he was in discussions with a number of parties interested in providing the company with exit financing. He hinted that GE, the affiliate RJ companies, and EDS were interested in helping US Airways. Moreover, RSA still is another possible bidder and private equity firms like MatlinPatterson have held discussions with US Airways too.""

[post="255405"][/post]​

I can't say that since I wasn't there. Lakefield was quoted in a newspaper article as saying something to the effect that "the list is long" - refering to potential investors.

Jim

 

[usairways_vote_NO]

I can't say that since I wasn't there.  Lakefield was quoted in a newspaper article as saying something to the effect that "the list is long" - refering to potential investors.

Jim

[post="255415"][/post]​

But not necessarily from that meeting?

Was it private meeting like he said or ALPA meeting like he said?

 

[BoeingBoy]

The sources that gave the info I posted - MEC reps - didn't quote Lakefield as saying anything like "the list [of potential investors] is long" in the meeting, but that doesn't mean he didn't say it there (though from what he is reported as saying it seems somewhat unlikely).

I'd have to go back and try to figure out which newspaper article first mentioned the "the list is long" quote, but I think it may have been the one by Dan Fitzpatrick in the PIT paper. He was reportedly (by USA320) as being at the meeting location - not in the meeting itself - and talked to management & employees (presumably pilots, since it was an ALPA meeting).

My personal interpretation (FWIW) is that they are talking to anybody who will accept their call. Something like if I wanted to borrow $1 million so I tear the "Banks" section out of the yellow pages and start making calls. If asked how many people I was talking to, I could certainly say "the list is long".....

Jim

oh, the info I posted was from the MEC quarterly meeting, so semi-private - only open to U pilots (including MEC members) and invited guests (like Lakefield, etc).

 

[savyinvestor]

767jetz I completely agree with your post. He is so anti UAL ! By the way, I don't recall who, but someone predicted he would start a thread like this and here it is! Back pedalling as fast as he can. Savy

 

[USA320Pilot]

This has nothing to do with being anti or pro UA, it's about what is happening in the marketplace and the facts. The issue with UA employees is that they do not like US employees; they want a pre-nuptial seniority list giving their employee super seniority if a merger occurs, and they do not like David Bronner saying he wants to buy UA assets for US. I understand the asset sale issue, which still could occur, but the pre-nuptial issue is part of the reason the Chicago-based airline is in bankruptcy today.

Moreover, I never go to the UA board, but UA employees always come to the US board. Interesting, huh...

At the ALPA MEC meeting, Lakefield told us he was talking to a number of parties about exit financing. Then he said that the company’s financial partners want to help US Airways survive. In order he said the ATSB, GE, affiliate carriers; EDS all are interested in helping US Airways.

Also noteworthy, US Airways' Eastshore agreement is DIP financing that can be converted to equity. Lakefield's "long list" of potential investors quote was in Friday and Saturday's Post-Gazette columns. Dan Fitzpatrick approached Lakefield as he left the Crowne Plaza Hotel and spoke to the CEO with David Castevetler when we took a meeting break at 1645 and we went into the hallway.

See Story

See Story #2

In regard to exit financing and liquidation, oil prices are eating up cash and to survive the company needs exit financing. That's no secret since the company has told the court in needs $250 million to emerge from bankruptcy.

Finally, in regard to BoeingBoy's comments from MEC member's in attendance, the comments are accurate from what I heard in-person and remember.

Regards,

USA320Pilot

 

[mlt]

How is it possible to make both statements at the same meeting? The list of investors is long and there isn't any money out there. My hunch is that the notes from certain MEC members are accurate and the information in the post gazette was given to the reporter from a certain captain.

 

[usairways_vote_NO]

How is it possible to make both statements at the same meeting?

[post="255436"][/post]​

Because it is 320 tellin you!!

 

[BoeingBoy]

I do have one question for USA320, if he happens to read this....

I've noticed you've started saying that AWAC will get 25% of the stock for their equity investment (converted DIP). Since the agreement only gives them that percentage if other equity investments total no more than $125 million, does this mean your "sources" are telling you that no one else is willing to invest more than that, or that that is all the additional investment the company is seeking now.

Jim

 

[700UW]

Jim,

I don't think there is 25% equity left in this company.

RSA owns around 37%
Pilots own 19%
Other unions own a high %.

I doubt there is 25% left for anyone to be given.

But hey, he never lets facts get in his way.

 

[FWAAA]

Jim,

I don't think there is 25% equity left in this company.

RSA owns around 37%
Pilots own 19%
Other unions own a high %.

I doubt there is 25% left for anyone to be given.

But hey, he never lets facts get in his way.

[post="255447"][/post]​

No, it could just mean that everyone else's share would be diluted. For instance, if 60 million shares are outstanding, all the company has to do is issue 20 million new shares to AWAC and voila - it now has 25% of the equity. Everyone else's ownership percentage dropped substantially. B)

And that doesn't even address the very real possibility that the current stock will be canceled, and the creditors given all the new stock.

 

[BoeingBoy]

And that doesn't even address the very real possibility that the current stock will be canceled, and the creditors given all the new stock.

[post="255453"][/post]​

As called for by the AWAC agreement......

Jim

 

[mweiss]

The issue with UA employees is that they do not like US employees...

...or at least a few of them. The fact that one of them seems to enjoy suggesting that a merger between the two companies would result in US being the "winner" might have something to do with it.

but the pre-nuptial issue is part of the reason the Chicago-based airline is in bankruptcy today.

Oh, puhleeze. If UA were to sell assets to US (ignoring the minor issue that US has nothing with which to buy any assets), the employees would be left out of the equation.

Moreover, I never go to the UA board...

You have a funny definition of "never." See what I mean?

 

[BoeingBoy]

***SPECULATION ALERT***

The question has been more or less asked "Why the contradiction in Lakefield's remarks concerning financing".

I can see two possible explanations...

1 - Lakefield was being brutally honest with the MEC (there's no financing out there) and putting a "good face" on remarks to the media (investors are lining up around the block).

2 - Lakefield was being honest with the media and softening up the MEC for upcoming bad news (parking more airplanes, more furloughs, more concessions, etc).

Just my 2 cents .....

Jim