Originally Posted by
tpersuit
The Note holders would have to approve a new agreement in order for Mesa to use those stocks for the bonds. Unless Mesa has already done that, which I don't think they have. If the bond holders say NO, then I'm guessing they will demand the cash, which will force a bankruptcy due to lack of funds. We'll learn soon enough.
ExpressJet issued new stock, but we had to renegotiate with our Note holders and the new agreement had us paying a portion in cash and issueing them a bunch in stock as well.
Originally Posted by
tpersuit
I think they still have to work a deal out with them. Basically I think J.O. now has an offer for the Note Holders, instead of just bankruptcy. Look for a part cash, part Stock deal like ExpressJet did. However, ExpressJet had a lot more cash to dish out to their Note Holders, where Mesa has hardly any.
I think the chances that the Note Holders demand cash is a lot higher at Mesa than it was at ExpressJet.
Plus, I think the Note Holders would get good amount of their money in the end if Mesa had to liquidate.
The note holders didn't have a say on how XJT pays them. XJT had the choice of paying them cash, stock, or a combination thereof. XJT had said in an SEC filling that their intent was to pay in stock only. The XJT note holders' only option was to take the shares or keep the notes at a higher interest rate. XJT only offered the higher interest rate notes in order to entice some of the note holders to stay put and prevent all note holders from requiring XJT to repurchase and possibly requiring bankruptcy protection because of their current cash position. The note holders never had a say or had a choice in getting paid with cash only. This was decided by a vote of the shareholders. In the end, some note holders requied XJT to repurchase the notes with stock and others opted to take the new notes at the higher interest rate.