ATA seeks $100 million exit financing, needs $50 million more to remain going concern

By Caroline Salls

Pittsburgh, Aug. 15 - ATA Holdings Corp. is seeking $100 million in exit financing and believes up to $50 million more will be needed to remain a going concern through the end of 2005, according to a 10-Q filing with the Securities and Exchange Commission.

According to the filing, the $50 million may come from additional debtor-in-possession financing, deferred debt payments, improved working capital, assets sales or operating cash flow improvements.

The company already has a $40 million DIP from Southwest Airlines Co., plus a commitment from Southwest for an exit facility to refinance the DIP.

Also, Southwest has agreed to buy $30 million in non-voting senior convertible preferred equity of the reorganized company.

These current financial projections are based on ATA reaching agreements with unions to achieve necessary cost savings, regauging its fleet, achieving estimated savings through outsourcing efforts and continuing successful codeshare operations at projected levels, the filing said.

In addition, according to the filing, if ATA is not able to implement a plan of reorganization, it is not likely to be able to continue as a going concern.

ATA Holdings Corp., ATA Airlines' parent, filed for bankruptcy on Oct. 26, 2004. The Dulles, Va.-based company's Chapter 11 case number is 04-19866.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.