Originally Posted by
CincoDeMayo
Spirit is now letting the credit card company hold back $3m a day in charges for collateral. Thats $3m a day in flight bookings that NK will not see until the passenger travels, $3m a day less cash flow to fund an operation that lost $2.8m a day during summer. My man, this is not good. The company needs cash, and this, along with the $50m upfront payment, further strains an already overstrained cash flow problem.
Spirit drawing down on their revolving credit line was already pre-approved from when they started borrowing the money on this line. All the bondholders did was take the last dollars allowed to them.
So they borrowed the last money that was pre approved under the existing line, to be paid back in 18 months, to help cash flow losses that are further strained by the credit card processor holding backing $3m a day as collateral.
We are all hoping for the best, and hope is great, but let's keep the eyes wide open. Too much fantasy land going on the last few years that everything is 1 quarter from turning around. Remember, Ted and the boys said that coming out of Chapter 11 they forecasted making $250m this year, instead they lost that amount last quarter.
i think his point is that the bank wouldn’t agree to continue letting nk operate at all if there wasn’t some hope on the horizon to get their money back. Whether that’s good for the pilots is another story.. is it’s an acquisition? Those aircraft finally sold? Some other event that will increase liquidity, none of us know but there must be something that motivated them to make a deal rather than pull the plug completely. They have no goodwill for NK they just want their money.