$250 Million Proposal For Control Of America West
PHOENIX (AP) _ A New York investment group has offered up to $250 million for control of America West Airlines under a bankruptcy reorganization proposal.
The offer Thursday from The Steinhardt Group came two days after the carrier announced that another potential purchaser, AWA Partners, withdrew from talks with the airline.
Phoenix-based America West has been operating under Chapter 11 protection since June 1991.
The Steinhardt proposal is the first received by America West since a Bankruptcy Court judge set a Feb. 10 deadline for submission of offers for the airline, America West Chairman W.A. Franke said.
The company will have 30 days after Feb. 10 to study the offers and recommend one to Judge Robert G. Mooreman, Franke said.
America West has been seeking $150 million to $200 million in new equity investment. The airline has said value of its existing stock probably will be wiped out during reorganization.
Creditors must approve the Steinhardt proposal.
America West had not reviewed details of the proposal but the offer of $150 million to $250 million ″was a reflection of the turnaround of the company,″ Franke said.
America West has reported three quarters of profits this year after 10 consecutive quarters of losses.
Mooreman, the bankruptcy judge, set the Feb. 10 deadline at the request of America West and two of its creditor groups - shareholders and unsecured creditors.
A source told The Associated Press on Tuesday that the talks with AWA Partners collapsed because Franke knew AWA Partners would oust him if it gained control. Franke has denied that he was the stumbling block in those talks.
AWA Partners included New York investment bank Wertheim Schroder & Co. and the Pritzker family of Chicago, which owns the Hyatt hotel chain.