Where is AF/KLM and their Billions?

[~~~^~~~]

Just curious. Where did the Air France involvement with DAL/NWA go?

 

[Noserider76]

Just curious. Where did the Air France involvement with DAL/NWA go?

The company stated it chose not to accept the investment at this time. Probably a good thing.

 

[Occam's Razor]

Well above our pay-grade. The foreign ownership piece might be a little too much for the DOJ to swallow right now.

Wait.

 

[IronCityBlue]

They can still invest a sizeable minority stake without going near the foreign ownership limits though, right? Last I hear they were considering investing about 1.5B, which if true would be well below the 25/49% foreign ownership rules.

 

[Occam's Razor]

Weeeeeelllll...

The issues will be "new stock" vs "old stock" (ie dilution for other shareholders), "special placement" vs "simple tender" (who gets to sell, and at what pre-set price), and "governance" (BOD seats).

Things that could trigger froggy Euros coming across the pond:

Luftansa invades (Hey! It's how they roll), and pumps money into UAL or XXX.

DOJ fasttracks approval for DAL-NWA, and the antsy shareholders cut a placement deal.

Other events outside of our radar range.

 

[Muskycat]

The board decided against it for the fact it would give AF a larger portion of ownership do to the current stock price, low market cap.

 

[ACL65PILOT]

Wise idea for now.

 

[Sedona16]

The board decided against it for the fact it would give AF a larger portion of ownership do to the current stock price, low market cap.

BINGO! Expect some money to come later when the stock is closer to twenty rather than below ten.

 

[IronCityBlue]

BINGO! Expect some money to come later when the stock is closer to twenty rather than below ten.

True, but does anyone realistically see that happenning this decade (i.e. before fuel settles back below 3 figure cyberhype?) We have at least one more rate cut coming, so 120-130/bbl is guaranteed for a while before the bubble pops.

 

[YourPilotFriend]

No negative attention needs to hinder the passing of Open Skies 2.

 

[Sedona16]

True, but does anyone realistically see that happenning this decade (i.e. before fuel settles back below 3 figure cyberhype?) We have at least one more rate cut coming, so 120-130/bbl is guaranteed for a while before the bubble pops.

I would say "it depends". Oil will be a large factor and so will the ability to get DAL/NWA pilots intergrated. Time will tell. I would imagine the money is there when Delta wants to sell some ownership. Air France/kLM is one of the most profitably airlines in the world making nearly 2B net profit in 2006 and beyond. They can afford it and want a piece of the action. Delta will just have to decide when it makes sense. I am guessing after watching the stock, getting DOJ approval and the pilots merged the cash could be used to build JFK, Tokyo/Asia and order more planes among other things.

 

[Jmoney]

Duh!

It's Air France, for christ's sake! They invested it in cheese and gay porn. -Duh!

 

[lowecur]

Actually, my crystal ball sees them waiting until they can get a controlling interest in a carrier or two and prices are at rock bottom. It's on the horizon folks, as the good ol USA will not be using taxpayor dollars to bail you guys out. These deals will have caveats of course, to protect national security.

imp:​

 

[NuGuy]

Other events outside of our radar range.

Harumph...the only thing my radar range does is over cook the chicken....

Nu

 

[Andy]

They can still invest a sizeable minority stake without going near the foreign ownership limits though, right? Last I hear they were considering investing about 1.5B, which if true would be well below the 25/49% foreign ownership rules.

Based on the interview on CNBC with NWA and DAL CEOs, someone invested $1.5B into the merger. The combined cash on hand was under $6B, but they clearly stated that they had more than $7B cash on hand.