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Virgin America financials.

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clickclickboom said:
Gotta Love it

Branson eats 290 mil for " conditional equity " and someone loans you 75 mil to boost cash on hand..

That " SHOULD " be illegal
Click to expand...

What law is that breaking to be illegal?

It's his money. If I loan you money, at a certain rate, I can then lower your rate and you'd owe me less. Who's gonna argue against that?
 
duc driver said:
From Bloomberg

"Virgin America also borrowed an additional $75 million after the first quarter ended, said Chief Financial Officer Peter Hunt"
Click to expand...

Peter Hunt doesn't have a reputation for being honest. It could be that a lot of that $75 million was informally loaned to VX prior to the end of Q1. I don't know and I don't trust Hunt.
I do find it almost impossible that VX could increase cash on hand by $1 million in Q4 with a net loss.
I'm thinking that VX did a bridge loan prior to the $75 million loan, and simply used a large part of the $75 million to pay off the bridge loan.

Flyer1015 said:
Andy, can you comment on debt restructuring? How does one wipe out nearly 1/3 billion in debt? Was it just a lower interest rate now?

and what's this part:


??? Conversion to conditional equity?
Click to expand...

It sounds like a debt to equity conversion where debtholders were converted to stockholders. And it's likely that only the Virgin Group did that. Hence the 'conditional equity'.
The reason why it's labeled conditional equity is due to the 25% limitation of stock owned by foreign interests. But if you dig a bit deeper in that rule, you'll find that it's 25% voting stock limit to foreigners. So the new stock holdings of Virgin Group is almost certainly nonvoting stock. That's much less valuable stock and there's probably a provision where the stock magically becomes voting stock when sold by Virgin Group.

The devil's in the details and I'll comment further once I have a chance to look at the VX form 41.


The timing of the $75 million loan doesn't make sense. $49 million cash on hand is enough to get through the summer without a problem, especially if losses in Q4 and Q1 total $18 million. Q2 and Q3 are VX's best quarters. That's why I think that a large part of the $75 million was added to the balance sheet prior to the close of Q1. But I really can't prove that until Q2's numbers are released and we can see cash on hand.

In closing, I think I stated that VX would need around $100 million to keep its doors open past 2013. I consider the $75 million to be 'close enough'. If there's an extra $75 million that shows up on Q2's cash on hand, they'll have no problem getting well beyond 2013 and could pull off an IPO after a few decent quarters.
 
IPO is about growth potential. If Virgin can show consistent profits while fending off attacks from the mega carriers, then VA really has unlimited growth opportunities. Virgin has moved into some of the hardest fought territory in the US. We are not a Spirit or Allegiant that has found niche markets. We are not a Southwest that grew by flying into secondary airports. Virgin goes right into a major hub and offers a better experience for the customer. If we can do Chicago, Dallas, and Newark profitably, what's going to stop us from going into Atlanta, Denver, Charlotte, Minneapolis, etc... United is throwing everything at us in Newark and our planes are still full. Last time I flew to Newark, I had 10 guests tell me as they de-planed that this was the best flight they had ever been on and they never want to fly the competition again. We are the In and Out Burger/Trader Joe's of the airlines. In the Bay Area and LA people rave about us. Moral here is through the roof. Our FAs are young and happy and cost half as much as a legacy FA -- same could be said about our gate agents. What other airline has this much potential for growth?
 
LoveGun said:
IPO is about growth potential. If Virgin can show consistent profits while fending off attacks from the mega carriers, then VA really has unlimited growth opportunities. Virgin has moved into some of the hardest fought territory in the US. We are not a Spirit or Allegiant that has found niche markets. We are not a Southwest that grew by flying into secondary airports. Virgin goes right into a major hub and offers a better experience for the customer. If we can do Chicago, Dallas, and Newark profitably, what's going to stop us from going into Atlanta, Denver, Charlotte, Minneapolis, etc... United is throwing everything at us in Newark and our planes are still full. Last time I flew to Newark, I had 10 guests tell me as they de-planed that this was the best flight they had ever been on and they never want to fly the competition again. We are the In and Out Burger/Trader Joe's of the airlines. In the Bay Area and LA people rave about us. Moral here is through the roof. Our FAs are young and happy and cost half as much as a legacy FA -- same could be said about our gate agents. What other airline has this much potential for growth?
Click to expand...
How is the KOOL-AID?
 
You see potential in your current company, and all of a sudden you drink kool-aid. Sad. You know it is possible to enjoy the company you work for and have faith in the future. It's okay. As pilots, i guess it is just bred into us to hate our company and just ask for more money.

What in his post is incorrect? (Other than morale. At least with the pilots it is not that high. The rest of the company is fine)
 
Last edited:
Andy said:
Peter Hunt doesn't have a reputation for being honest. It could be that a lot of that $75 million was informally loaned to VX prior to the end of Q1. I don't know and I don't trust Hunt.
I do find it almost impossible that VX could increase cash on hand by $1 million in Q4 with a net loss.
I'm thinking that VX did a bridge loan prior to the $75 million loan, and simply used a large part of the $75 million to pay off the bridge loan.



It sounds like a debt to equity conversion where debtholders were converted to stockholders. And it's likely that only the Virgin Group did that. Hence the 'conditional equity'.
The reason why it's labeled conditional equity is due to the 25% limitation of stock owned by foreign interests. But if you dig a bit deeper in that rule, you'll find that it's 25% voting stock limit to foreigners. So the new stock holdings of Virgin Group is almost certainly nonvoting stock. That's much less valuable stock and there's probably a provision where the stock magically becomes voting stock when sold by Virgin Group.

The devil's in the details and I'll comment further once I have a chance to look at the VX form 41.


The timing of the $75 million loan doesn't make sense. $49 million cash on hand is enough to get through the summer without a problem, especially if losses in Q4 and Q1 total $18 million. Q2 and Q3 are VX's best quarters. That's why I think that a large part of the $75 million was added to the balance sheet prior to the close of Q1. But I really can't prove that until Q2's numbers are released and we can see cash on hand.

In closing, I think I stated that VX would need around $100 million to keep its doors open past 2013. I consider the $75 million to be 'close enough'. If there's an extra $75 million that shows up on Q2's cash on hand, they'll have no problem getting well beyond 2013 and could pull off an IPO after a few decent quarters.
Click to expand...
It was confirmed in the all-hands meeting the 75 million is a new thing, well after the first quarter ended. The cash on hand at the end of 4th quarter and 1st quarter is as stated without any help of the 75 million.
 
Morale is the only question I had... I wouldn't say morale is through the roof when a high percentage (very high) of people I fly with have applications out or are in the process of doing so. We aren't only talking junior people here either...
 
Flyer1015 said:
It was confirmed in the all-hands meeting the 75 million is a new thing, well after the first quarter ended. The cash on hand at the end of 4th quarter and 1st quarter is as stated without any help of the 75 million.
Click to expand...

I don't think you understand what I'm saying about bridge loans in Q4 and Q1. I suspect that's what got them through and then they paid them off with some or all of the $75 million. There's no mention of other loans because they were paid off with some of the $75 million
Let me put it this way: Q4 and Q1 had a combined net loss of $71.378 million, yet they only burned through $17 million cash? Unpossible; Hunt used some cheap accounting tricks.

I looked at Q4's form 41s today. There's no information for VX. HUGE red flag. That means that they asked for an exemption to submit the data after the due date.
 
I'm sure Peter Hunt is having to 're-working' the numbers.

I hope he doesn't try and use derivatives like he did at Pinnacle. What a disaster that turned out to be. They pretty much made the employees pay for his screw up. It was so bad, they cancelled funding the FA's 401k to make their obligations. Peter is one slick dude.
 
Andy said:
I don't think you understand what I'm saying about bridge loans in Q4 and Q1. I suspect that's what got them through and then they paid them off with some or all of the $75 million. There's no mention of other loans because they were paid off with some of the $75 million
Let me put it this way: Q4 and Q1 had a combined net loss of $71.378 million, yet they only burned through $17 million cash? Unpossible; Hunt used some cheap accounting tricks.

I looked at Q4's form 41s today. There's no information for VX. HUGE red flag. That means that they asked for an exemption to submit the data after the due date.
Click to expand...

So the question is, why do people continue to throw money at VX if it's operating with such shady practices? Are they being taken for ride? Why would Branson take conditional ownership of an operation if it were operating in a shady manner? Other than the assumed "HUGE red flag" senario, is there any other possible reason they didn't file?

Thanks for all the evals.
 
Virgin America is closing the doors any day now! They wont be around in a month! Everyone get out while you can! The ship is taking on water at an alarming rate!


Wait. Haven't we been hearing this for 5 1/2 years now? I find it interesting that so many are hell bent on others demise. I've never wished or hoped for someone to be put on the street. Guess it says a lot about ones character.

It also appears that there are more accountants and corporate attorneys on here than pilots. Pretty amazing. lol
 

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