Did Mesa get the votes?

[pdub20s]

www.mesahub.com

No news yet but come join us.

Don't do it!!! If you want to keep your sanity, brain cells, and not contemplate suicide....STAY AWAY FROM MESAHUB.

 

[zawillif]

It's comforting to know that if we go to nuclear war with Iran or China Mesa will still be around to fly the cockroaches where ever they want to go.

 

[ePilot22]

Ok. So 30 minutes later, I've found my answer:

MESA is authorized to pay the bondholders with these newly issued shares. Based on MESA's SEC filing on Nov. 24th the need for 900M shares would happen if the stock fell to $.10/share.

The below table illustrates the effect of the market price for the Company's Common Stock, and the resulting amount of Common Stock that the Company must issue, if all Forbearing Holders and the holders of the 2024 Notes require the Company to repurchase all of their Senior Notes, and if the Company elects to satisfy its Note Repurchase Obligations solely by issuing shares of Common Stock

Market Price
$0.25

Maximum Note Repurchase Obligation

$94,500,000

Number of Shares of Common Stock that the Company Must Issue

378,000,000

The Company wishes to retain the flexibility to use all cash, all stock or a combination thereof to satisfy its Note Repurchase Obligations in the event that the Forbearing Holders and the holders of 2024 Notes exercise their Forbearing Put Rights and 2009 Put

Roughly as it is now they'll need to issue 378M shares (little less) to pay the bondholders.

Sucks for them!







eP.

 

[DoinTime]

The problem is that you can't just print money like this. Issuing more shares just dilutes the stock price while at the same time reallocates who owns that equity. So what JO is essentially doing is stealing money from his shareholders to pay off the company debt. Just like the Mesa pilots wouldn't stand up to JO neither will the shareholders.

JO will walk out of this mess both a hero and a king in the buisness world. Meanwhile everyone who makes the company what it is gets screwed by their own cowardly refusal to stand up for themselves.

 

[~~~^~~~]

Here's the Press Release:

NEW YORK, Jan 7 (Reuters) - Struggling U.S. airline Mesa Air Group Inc (MESA.O) said on Wednesday its shareholders approved a plan to increase the number of company shares by 1,100 percent and issue new stock.

The move would allow the regional carrier to buy back its bonds from investors if necessary.
The airline, which provides regional service for Delta Air Lines (DAL.N) and other carriers, has been looking to shore up its finances for months as it tries to ride out volatile fuel prices and a dip in travel demand.

Its shares have fallen 93 percent in the last year to close at 28 cents on the Nasdaq.

What is 28 cents, diluted by (gulp) 1,100 percent?

 

[Broke in CVG]

So under the new Mesa contract, you guys get a 1,100% raise too, huh?

JO pays the bonds with equity (or phony equity) and then Bankruptcy there you go. Equity holders are the LAST to get their $.

I can't believe the pilots at Mesa were so stupid to fall for JO's master plan to BK and walk away. Well, actually yes I can.

Mesa sucks!

 

[V-1]

I suspect this is just a strategic move to make it less attractive for bondholders to demand payment in 2009. The conversation goes something like this:

"We want our money back."

"Okay, but all we have is a billion shares of stock to give you."

"These things aren't worth anything to us...you're likely to file bankruptcy anyway."

"So what's your point anyway?"

"Ahhh, screw it. We'll wait another twenty years for our money."

On the other hand, how do you give 90% of the shares outstanding in common stock without losing control of the company?

There may be potential for yet another court proceeding against Mesa as bondholders file suit to recover payment in cash or shares that control the company in order to effect a takeover and subsequent liquidation of assets...assuming Mesa has any that aren't already encumbered.

 

[Tarzan]

All this move does is delay the inevitable. Mesa hasn't been paying their bills for parts, etc. Eventually, someone is going to tell MAG to take a hike. Once this starts, things will quickly spiral down the drain. MAG does not have either the assets or cash to survive this thing.

 

[dooork]

The problem is that you can't just print money like this. Issuing more shares just dilutes the stock price while at the same time reallocates who owns that equity. So what JO is essentially doing is stealing money from his shareholders to pay off the company debt. Just like the Mesa pilots wouldn't stand up to JO neither will the shareholders.

JO will walk out of this mess both a hero and a king in the buisness world. Meanwhile everyone who makes the company what it is gets screwed by their own cowardly refusal to stand up for themselves.

Sounds a little better than BK...like so many other airlines that completely screwed their shareholders and vendors!

 

[flyboyike]

MAG does not have either the assets or cash to survive this thing.

I've hearing that for years.

 

[Tarzan]

I've hearing that for years.

MAG hasn't seen the credit market freeze during it's existence either.

 

[flyboyike]

MAG hasn't seen the credit market freeze during it's existence either.

Perhaps.