Word: twa
(lookup in dictionary)
(lookup stats)
Dates: all
Sort By: most recent first
(reverse)
...TWA owner Carl Icahn may not know much about running an airline, but then, many of those who did have gone out of business during the past few tumultuous years. Unlike most of them, Icahn is a crafty dealmaker. Last week, cornered by bondholders who threatened to push his troubled airline into involuntary bankruptcy, he struck an agreement that may save it. Before the deal can fly, though, it must pass inspection by both the Securities and Exchange Commission and a bankruptcy court. Even then, TWA will face a steep climb against extremely powerful competition. Admits the blunt-spoken financier...
...Icahn's strategy is a so-called prepackaged Chapter 11 agreement under which TWA will shed almost half its $2.4 billion in debts and emerge from its reorganization with $400 million in operating cash. Similar to the arrangement that Donald Trump fashioned with his bankers earlier this summer, such a deal eliminates much of the uncertainty that managers face when they surrender control of a tattered enterprise to a bankruptcy judge. Instead, the owner and creditors present the judge with a solution acceptable to all. If the complex TWA agreement is approved, the carrier may swoop...
Maybe so. Icahn won't do badly either. Even though owners of TWA's common stock would get nothing under the proposed deal, Icahn, who owns 90% of the stock, will benefit. Another portion of the agreement gives most of the stock in the restructured firm to owners of TWA's mostly worthless bonds. As the airline's largest bondholder, Icahn will receive a 20% stake in the company. He has agreed to pay $35 million for bonds and stock worth an additional 25%. All in all, Icahn has managed an impressive financing feat, maintaining control and getting...
...While TWA will emerge with a cleaner balance sheet, it is still stuck with a frayed route structure and one of the oldest fleets in the world (80% of its jets are more than 10 years old, vs. 35% for industry leader American). Says Edward Starkman, who follows the airline industry for PaineWebber: "TWA is one of the great weaklings of the business. The capital required to turn this company around would make your head spin: tens of billions of dollars in new planes alone...
...struggling carriers have shed weight in their struggle to stay aloft, American, United, Delta and Northwest (combined U.S. market share: 70%) have moved to expand into new markets by snapping up the best parts. American and United are pushing into Latin America. In the transatlantic market, where TWA and Pan Am have steadily lost ground over the years to heavily subsidized European flag carriers, American, United and Delta will present much more formidable competition. One measure of their clout: each airline is larger than all the European carriers combined...