The parent company of bankrupt airline ATA has reached an agreement with private equity fund MatlinPatterson Global Opportunities Partners LP for as much as $100 million in financing.
Under the proposal, MatlinPatterson would provide $30 million to ATA Holdings Corp., so the airline could continue operating, ATA said in a news release Thursday. MatlinPatterson also agreed to invest up to $70 million in equity following ATA's emergence from Chapter 11.
"With the commitment for this capital investment, we are on the path to emerge from bankruptcy in early 2006," said John Denison, ATA's president and CEO.
The financing is subject to court and regulatory approval. Indianapolis-based ATA said it expects to seek final court approval of the debtor-in-possession financing on Dec. 6. The $30 million would convert into equity in the reorganized company upon ATA's emergence from bankruptcy reorganization.
ATA Holdings filed for Chapter 11 bankruptcy protection in October 2004. Once the nation's 10th largest passenger carrier, it has cut more than 3,000 jobs since it began downsizing from a work force of 7,800 people two years ago.
MatlinPatterson specializes in control investments in distressed businesses.
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