Trade Journal: $500 Million KLM Injection Into Northwest Is Off
Nov. 10, 1992
EAGAN, Minn. (AP) _ A trade journal reported Monday that a deal for KLM Royal Dutch Airlines to invest up to $500 million in new money in Northwest Airlines has collapsed.
Commercial Aviation Report had reported the deal on Wednesday. A congressman also said there was such a transaction.
But KLM spokeswoman Odette Fodor said Monday that there never had been a deal. ''Both stories are incorrect,'' she said.
KLM, which provided $400 million to back a $3.6 billion leveraged buyout of Northwest in 1989, holds a 49 percent stake in the Eagan, Minn.-based carrier.
Commercial Aviation Report said the deal fell through on Thursday, one day before Northwest was to announce the pact to a group of bankers that financed the leveraged buyout.
Rep. James Oberstar, D-Minn., had said last week that confidential documents submitted to the government outlined KLM's intent to invest new money into Northwest. He declined to elaborate.
Northwest refused to comment Monday on the latest report.
''Northwest, as a matter of longstanding policy, does not comment on rumors or speculation,'' spokesman Jon Austin said.
Commercial Aviation Report also said Monday that Northwest asked its banking group, headed by Bankers Trust Co. of New York, to defer more than $200 million in principal due next year and reschedule it over the balance of the term, maturing in 1997.
Bankers Trust officials did not immediately return a phone call seeking comment.
Austin said Northwest's annual meeting with bankers Friday was routine.
''Results for the year to date were reviewed as was the outlook for 1993,'' he said. ''The meeting was successful and productive.''