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Tudor Group Commits $65 Million in New Equity Funding to US
Airways-America West Upon Completion of Merger
ARLINGTON, Va., July 7 /PRNewswire-FirstCall/ -- America West Group Holdings
(NYSE:AWA) and US Airways Group, Inc. (OTC:UAIRQ) (BULLETIN BOARD: UAIRQ)
announced today that Tudor Investment Corp., a leading asset management firm,
has made a $65 million commitment to provide equity funding for US Airways'
Plan of Reorganization (POR) in exchange for approximately 3.9 million shares
of new common stock at a price of $16.50 per share. Funding will occur along
with other equity investments upon completion of the merger.
"The inclusion of Tudor as a new equity partner is a clear indication that
investors continue to find great potential in our proposed merger with America
West Airlines," said Bruce R. Lakefield, US Airways president and chief
executive officer. "We are making tremendous progress in completing a merger
that will provide the combined airline financial stability in this highly
competitive marketplace."
The Tudor Group, which consists of Tudor Investment Corporation and its
affiliates, is involved in active trading, investing, and research in the
global equity, debt, currency, and commodity markets. Founded in 1980 by Paul
Tudor Jones II, the firm currently manages over $11 billion. The firm's
investment capabilities are broad and diverse, including global macro trading,
fundamental equity investing in the United States and Europe, emerging markets,
venture capital, commodities, event driven strategies and technical trading
systems.
The other equity partners funding the US Airways POR and merger with America
West are ACE Aviation Holdings Inc., ($75 million commitment) a Canadian
holding company that owns Air Canada, Canada's largest airline with over $7.5
billion in annual revenues; PAR Investment Partners, L.P., ($100 million
commitment) a Boston-based investment firm; Peninsula Investment Partners,
L.P., ($50 million commitment) a Virginia-based investment firm; and Eastshore
Holdings LLC, ($125 million commitment and agreement to provide regional
airline services), which is owned by Air Wisconsin Airlines Corp., and its
shareholders. The rights offering could provide an additional $150 million of
equity financing.
As announced, the merger will be funded by $565 million in new equity
investment and participation by suppliers and business partners that will
provide the company with approximately $1.5 billion in liquidity. Terms of the
Tudor agreement have been filed with the U.S. Bankruptcy Court for the eastern
district of Virginia, where the US Airways case is being heard.
The US Airways and America West merger, which is expected to close in the early
fall, will create the first full-service low-cost nationwide airline, with a
consumer-friendly pricing structure offering a network of low-fare service to
over 200 cities across the United States, Canada, Mexico, Latin America, the
Caribbean and Europe, and amenities that include an extensive frequent flyer
program, airport clubs, assigned seating and First Class cabin service. The
airline will operate under the US Airways brand and will be headquartered in
Tempe, Ariz.
The U.S. Department of Justice has completed its review of the proposed merger
of the two airlines without issuing a formal request for additional information
(commonly referred to as a "second request"). Since the 30-day period for
alternative offers on the proposed merger ended without any competing offers
having been submitted, and since there are no qualified competing plan
proposals, US Airways will proceed to seek confirmation of the POR implementing
the merger agreement and investment agreements.
FORWARD-LOOKING STATEMENTS
Certain of the statements contained herein should be considered "forward-
looking statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements may be identified by
words such as "may," "will," "expect," "intend," "anticipate," "believe,"
"estimate," "plan," "could," "should," and "continue" and similar terms used in
connection with statements regarding the companies' outlook, expected fuel
costs, the RASM environment, and the companies' respective expected 2005
financial performance. Such statements include, but are not limited to,
statements about the benefits of the business combination transaction involving
America West Holdings Corporation ("America West") and US Airways Group, Inc.
("US Airways" and, together with America West, the "companies"), including
future financial and operating results, the companies' plans, objectives,
expectations and intentions and other statements that are not historical facts.
Such statements are based upon the current beliefs and expectations of America
West and US Airways' management and are subject to significant risks and
uncertainties that could cause the companies' actual results and financial
position to differ materially from these statements. Such risks and
uncertainties include, but are not limited to, the following: the ability of
the companies to obtain and maintain any necessary financing for operations and
other purposes, whether debtor-in-possession financing, in the case of US
Airways, or other financing; the ability of the companies to maintain adequate
liquidity; the duration and extent of the current soft economic conditions; the
impact of global instability including the continuing impact of the continued
military presence in Iraq and Afghanistan and the terrorist attacks of Sept.
11, 2001 and the potential impact of future hostilities, terrorist attacks,
infectious disease outbreaks or other global events; changes in prevailing
interest rates; the ability to attract and retain qualified personnel; the
ability of the companies to attract and retain customers; the cyclical nature
of the airline industry; competitive practices in the industry, including
significant fare restructuring activities by major airlines; the impact of
changes in fuel prices; economic conditions; labor costs; security-related and
insurance costs; weather conditions; government legislation and regulation;
relations with unionized employees generally and the impact and outcome of the
labor negotiations; US Airways' ability to continue as a going concern; US
Airways' ability to obtain court approval with respect to motions in the
Chapter 11 proceedings prosecuted by it from time to time; the ability of US
Airways to develop, prosecute, confirm and consummate one or more plans of
reorganization with respect to the Chapter 11 proceedings; risks associated
with third parties seeking and obtaining court approval to terminate or shorten
the exclusivity period for US Airways to propose and confirm one or more plans
of reorganization, to appoint a Chapter 11 trustee or to convert the cases to
Chapter 7 cases; the ability of US Airways to obtain and maintain normal terms
with vendors and service providers; US Airways' ability to maintain contracts
that are critical to its operations; the potential adverse impact of the
Chapter 11 proceedings on US Airways' liquidity or results of operations; the
ability of US Airways to operate pursuant to the terms of its financing
facilities (particularly the financial covenants); the ability of US Airways to
fund and execute its Transformation Plan during the Chapter 11 proceedings and
in the context of a plan of reorganization and thereafter; and other risks and
uncertainties listed from time to time in the companies' reports to the SEC.
There may be other factors not identified above of which the companies are not
currently aware that may affect matters discussed in the forward-looking
statements, and may also cause actual results to differ materially from those
discussed. The companies assume no obligation to publicly update any
forward-looking statement to reflect actual results, changes in assumptions or
changes in other factors affecting such estimates other than as required by
law. Similarly, these and other factors, including the terms of any
reorganization plan of US Airways ultimately confirmed, can affect the value of
US Airways' various prepetition liabilities, common stock and/or other equity
securities. Accordingly, the companies urge that the appropriate caution be
exercised with respect to existing and future investments in any of these
liabilities and/or securities. Additional factors that may affect the future
results of America West and US Airways are set forth in their respective
filings with the SEC, which are available at
http://www.shareholder.com/americawest/edgar.cfm and
http://investor.usairways.com/edgar.cfm, respectively.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
In connection with the proposed merger transaction, America West Holdings and
US Airways Group have filed a Registration Statement on Form S-4 and other
documents with the Securities and Exchange Commission (Registration No. 333-
126162) containing a preliminary joint proxy statement/prospectus regarding the
proposed transaction. The proxy statement/prospectus will be mailed to
stockholders of America West Holdings after the registration statement is
declared effective by the SEC. WE URGE INVESTORS TO READ THE REGISTRATION
STATEMENT AND PROXY STATEMENT AND OTHER RELATED MATERIALS CAREFULLY WHEN THEY
BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE
PROPOSED TRANSACTION. Investors will be able to obtain free copies of the
registration statement and proxy statement (when available) as well as other
filed documents containing information about US Airways Group and America West
Holdings at http://www.sec.gov/, the SEC's Web site. Free copies of America
West Holdings' SEC filings are also available on America West Holdings' Web
site at http://www.shareholder.com/americawest/edgar.cfm, or by request to
Investor Relations, America West Holdings Corporation, 111 West Rio Salado
Pkwy, Tempe, Arizona 85281. Free copies of US Airways Group's SEC filings are
also available on US Airways Group's Web site at
http://investor.usairways.com/edgar.cfm or by request to Investor Relations, US
Airways Group, Inc., 2345 Crystal Drive, Arlington, VA 22224.
This communication shall not constitute an offer to sell or the solicitation of
an offer to buy any securities, nor shall there by any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be unlawful
prior to registration or qualification under the securities laws of any such
jurisdiction. No offering of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the Securities Act of
1933, as amended.
PARTICIPANTS IN THE SOLICITATION
America West Holdings, US Airways Group and their respective executive officers
and directors may be deemed, under SEC rules, to be participants in the
solicitation of proxies from America West Holdings' stockholders with respect
to the proposed transaction. Information regarding the officers and directors
of America West Holdings is included in its definitive proxy statement for its
2005 Annual Meeting filed with the SEC on April 15, 2005. Information regarding
the officers and directors of US Airways Group is included in its 2004 Annual
Report filed with the SEC on Form 10-K on March 1, 2005. More detailed
information regarding the identity of potential participants, and their
interests in the solicitation, will be set forth in the registration statement
and proxy statement and other materials to be filed with the SEC in connection
with the proposed transaction.
DATASOURCE: US Airways Group, Inc.
CONTACT: America West Holdings Corp., +1-480-693-5729; or David
Castelveter of US Airways Group, Inc., +1-703-872-5100
Web site: http://www.usairways.com/