Mon, Dec 08, 2003
Trinity Rival Could Ignite Bidding War
Just when Air Canada
thought it was going to meet up with its white knight and all his
money, it now appears there's another suitor for the bankrupt
Canadian airline. Cerberus Corporation is expected to tender an
offer for the company that could top an offer already on the table
from Victor Li's Trinity Time Investments.
The Trinity offer is about $650 million and would make Li the
biggest single investor in Air Canada. "We'll be vigorously seeking
the court's approval of the agreement," Mark Gelowitz, a lawyer for
Trinity, said of tomorrow's court hearing.
The airline is also hopeful that the Trinity deal will go
through, for several reasons. Even though Li is from Hong Kong,
Trinity is a Canadian company. It's expected Trinity will settle
outstanding Air Canada debts with major creditors like GE. "The
selection of an equity plan sponsor around whom a comprehensive
plan can be built is a crucial milestone in the restructuring of
Air Canada and is of benefit to all stake holders," the airline
said.
Not only that, but if Air Canada
busts its deal with Trinity, it'll be liable for $19.5 million in
breakup fees.
Time appears to be running out in Air Canada's bankruptcy.
SNECMA, a French aerospace company that makes jet engines, is
expected to ask the Canadian bankruptcy court for permission to sue
the airline. SNECMA says Air Canada's bankruptcy has cost it $51
million dollars owed to its creditors and accuses Air Canada
managers of fraud.
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