Amtran Seeks Financing As Citi, Salomon Fly Away
Amtran, parent company of American Trans Air, is evaluating financing options, including another credit facility to back a privatization plan. Citicorp and Salomon Smith Barney terminated their commitment letter relating to a proposed $175 million secured credit facility last Friday night, citing the material adverse change clause as a get-out, explained Kim Wick, manager of investor relations. Wick said, however, the privatization is on hold for the moment and has not yet been scrapped. Financing and the shareholder vote are the only hurdles left, she added.
Wick could not comment on whether bids would be sent out to other lenders, but she said another credit facility has not been ruled out. One banker expressed disbelief that the transaction could still go ahead. "I cannot see anyone in the short-term committing to an airline deal," he said. Amtran would have to pay a lot of money for a bank to lead a deal, he noted, adding, the company is also unlikely to get a high-yield transaction done in this market.
Last Wednesday, Citi and Salomon sent a letter to Amtran requesting information regarding the business condition, operations and properties of the Indianapolis-based company (LMW, 9/24).