The New Us Airways Must Be Flush With Cash

[JayBrian]

TEMPE, Ariz., Oct. 3 /PRNewswire-FirstCall/ -- US Airways Group, Inc., (NYSE: LCC - News), today announced it has agreed to repurchase all of the replacement warrants recently issued to the Air Transportation Stabilization Board (ATSB) in connection with the recently completed merger with America West Holdings Corporation. US Airways Group will repurchase approximately 7.7 million warrants to purchase shares of common stock that have an exercise price of $7.27 per share. The total purchase price for the warrants will be approximately $115.8 million.



Complete article here

 

[FWAAA]

Guess that's one reason Doug has been scouring the Street for cash lately.

 

[a320av8r]

Keeps somebody else from making a run on us.

 

[autofixer]

I hope burning that cash, does not come back to haunt LCC in a few years...a la Wolfe's stock buy back.

 

[a320av8r]

"Mark Dayton, the board's executive director, said the government still holds warrants in Frontier Airlines and World Airways and is looking to cash those out as well."

Probably had to do with ATSB trying to get out of the airline business...

 

[BoeingBoy]

They're also either talking about or actively trying to sell the loans, also.

Jim

 

[JayBrian]

They're also either talking about or actively trying to sell the loans, also.

Jim

[post="308382"][/post]​

I thought it was a few banks that held the loans and the ATSB was just guaranteeing the loans.

 

[JayBrian]

I hope burning that cash, does not come back to haunt LCC in a few years...a la Wolfe's stock buy back.

[post="308346"][/post]​

I agree with the need to preserve cash. The thinking was probably to prevent the dilution of the shares at a discount price.

 

[BoeingBoy]

I thought it was a few banks that held the loans and the ATSB was just guaranteeing the loans.

[post="308387"][/post]​

That is correct - the ATSB guarantees the "Tranch A" portion (90%) and the "Tranche B" portion is not guaranteed.

However, here's what I read:

"Mark Dayton, the ATSB's executive director, said the board continues to explore the possibility of selling both federally secured loans owed by new US Airways -- $700 million from the old US Airways account and $300 million for America West -- to private lenders."

 

[FWAAA]

I thought it was a few banks that held the loans and the ATSB was just guaranteeing the loans.

[post="308387"][/post]​

I'm not certain, but Bankruptcy II may have caused those lenders to demand that the ATSB make good on the guarantee - and the ATSB simply bought the paper. The Ch 11 filing probably triggered the guarantee.

 

[BoeingBoy]

As recently as when the ATSB approved the merger and mostly co-ordinated the terms of the two loans, they only guaranteed the Tranche A loans. There was a motion and judges order approving it.

Course, anything could have happened since then.

Jim