Midnight Mike
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New bid emerges for Aloha
Wednesday September 28, 1:35 am ET
A competing bid for Aloha Airlines, led by former Hawaiian Airlines CEO and president Bruce Nobles, has been filed in U.S. Bankruptcy Court.
Perseus LLC, a New York-based private equity fund manager with $2 billion in assets, is offering $120 million for the airline in what it claims is a better deal than the current plan proposed by The Yucaipa Companies LLC of Aloha Airlines' management and Aloha Aviation Investment Group LLC.
Last week, Aloha Airlines announced it had found investors to put $100 million in the airline as a step to its exit from bankruptcy. However, the deal with the investors is at best conditional and includes an exclusivity clause for Yucaipa and Aviation Investment Group as investors, a $3 million break-up fee and reimbursement of expenses.
The uncertainity seems to offer other potential investors another chance at bidding for the airline and it is likely that the offer price may rise if the competition heats up. The airline has been in bankruptcy since last Dec. 30.
Perseus, in its letter to Aloha CEO David Banmiller dated Sept. 1, said it was drawn to Aloha Airlines because of discussions with Nobles, who recently led an unsuccessful bid to buy Hawaiian Airlines.
Perseus's proposal includes the following terms:
It would acquire all or a majority of the airline's assets, including its cargo division, under a new entity named "Newco."
The company would pay $50 million -- $41 million toward working capital and $9 million to go toward paying off creditors.
Newco would also pay off the airline's $65-million bridge financing.
Nobles would be named CEO and run the business. The rest of the current management team would be retained. Newco would be managed by a board of directors controlled by Perseus.
Newco said it would rehire a "specific number" but not all of Aloha's existing employees.
Perseus added that it couldn't proceed with its offer because of a lack of response from the company and that's why it is seeking the intervention of the bankruptcy court. The company wants Judge Robert Faris to direct Aloha executives to meet with Perseus representatives and provide information.
"If [Perseus] were provided with certain minimal information, it believes that it is likely that it could propose a transaction that would provide more value to the estate than the transaction currently before the court," the company said in its filing.
Perseus LLC is a fund manager whose senior management includes former ambassador Richard Holbrooke, and James Johnson, former chairman and CEO of Fannie Mae. The company has offices in Washington, D.C., and San Francisco.
Published September 27, 2005 by Pacific Business News
Wednesday September 28, 1:35 am ET
A competing bid for Aloha Airlines, led by former Hawaiian Airlines CEO and president Bruce Nobles, has been filed in U.S. Bankruptcy Court.
Perseus LLC, a New York-based private equity fund manager with $2 billion in assets, is offering $120 million for the airline in what it claims is a better deal than the current plan proposed by The Yucaipa Companies LLC of Aloha Airlines' management and Aloha Aviation Investment Group LLC.
Last week, Aloha Airlines announced it had found investors to put $100 million in the airline as a step to its exit from bankruptcy. However, the deal with the investors is at best conditional and includes an exclusivity clause for Yucaipa and Aviation Investment Group as investors, a $3 million break-up fee and reimbursement of expenses.
The uncertainity seems to offer other potential investors another chance at bidding for the airline and it is likely that the offer price may rise if the competition heats up. The airline has been in bankruptcy since last Dec. 30.
Perseus, in its letter to Aloha CEO David Banmiller dated Sept. 1, said it was drawn to Aloha Airlines because of discussions with Nobles, who recently led an unsuccessful bid to buy Hawaiian Airlines.
Perseus's proposal includes the following terms:
It would acquire all or a majority of the airline's assets, including its cargo division, under a new entity named "Newco."
The company would pay $50 million -- $41 million toward working capital and $9 million to go toward paying off creditors.
Newco would also pay off the airline's $65-million bridge financing.
Nobles would be named CEO and run the business. The rest of the current management team would be retained. Newco would be managed by a board of directors controlled by Perseus.
Newco said it would rehire a "specific number" but not all of Aloha's existing employees.
Perseus added that it couldn't proceed with its offer because of a lack of response from the company and that's why it is seeking the intervention of the bankruptcy court. The company wants Judge Robert Faris to direct Aloha executives to meet with Perseus representatives and provide information.
"If [Perseus] were provided with certain minimal information, it believes that it is likely that it could propose a transaction that would provide more value to the estate than the transaction currently before the court," the company said in its filing.
Perseus LLC is a fund manager whose senior management includes former ambassador Richard Holbrooke, and James Johnson, former chairman and CEO of Fannie Mae. The company has offices in Washington, D.C., and San Francisco.
Published September 27, 2005 by Pacific Business News
