Flight International online news 11:00GMT: Independence Air may have to file for Chapter 11 bankruptcy protection if it fails to address liquidity problems.
In a US Securities and Exchange Commission (SEC) filing, the carrier says it has “engaged advisors and is making contingency plans for a potential Chapter 11 bankruptcy filing”.
It adds: “There can be no assurances, should the company be required to seek such protection, that it will not be required to liquidate under Chapter 7.”
Independence chairman and CEO Kerry Skeen yesterday said the carrier was taking “all necessary and prudent steps” to enhance its liquidity. “We have a tough time ahead, but we have a number of sources of cash and we are in discussions with third parties for financing,” he told analysts in a second quarter earnings call, which detailed a $98.5 million net loss.
However, in its SEC filing the carrier says it “can provide no assurances that its efforts to address these significant cash flow issues will be successful”.
Independence held $66 million in cash on 30 June, more than $100 million less than at 31December. The SEC filing reveals the carrier’s long-term debt stands at $253.8 million, compared to $230.2 million at the end of 2004.
Source: Flight International
