Western Global Airlines reaches bankruptcy financing deal
Western Global Airlines has reached a deal with creditors that would allow the cargo carrier to keep operating while it reworks its debt load in a potential bankruptcy, according to people familiar with the matter.
The distressed carrier has lined up $77.3 million of bankruptcy financing at a rate of 9% over the Secured Overnight Financing Rate to fund the company’s operations while in Chapter 11 protection, according to the people, who asked not to be identified because the matter is private. The cargo airline is expected to seek court protection from creditors in the coming days, the people said.
→ Alaska Airlines partners with NASA and Boeing to develop sustainable airliner
The deal includes a roll-up of debt held by founder and Chief Executive Officer Jim Neff while other creditors, including bondholders, will provide about 50% of the financing, said the people. It also puts Neff in position to retain control of the company following its emergence from bankruptcy, they said.
The airline has been considering options including a bankruptcy filing to address its debt load while facing dwindling liquidity for months.
Neff last month bought the airline’s secured debt — trading at a steep discount — as he sought to keep the company alive through a restructuring, Bloomberg reported. In the process, he irked at least some investors because his status as a loan holder has put him ahead of unsecured bondholders in the repayment line.
Photo: Hawkeye UK/Wikimedia
Related Topics
JetSMART Named “Airline with the Lowest Emissions in Latin America,” Cirium Say
SKY Airline Celebrates 25 Years, Consolidating Its Low-Cost Model and Regional Connectivity
Avianca Elevates Loyalty Strategy With Launch of Magno: An Ultra-Exclusive Status for LifeMiles
Arajet Effect”: Air Connectivity Between Dominican Republic and Peru Surges 171%
Plataforma Informativa de Aviación Comercial con 13 años de trayectoria.