Originally Posted by
aviators99
Black Rock Capital can't pull funding unless Virgin finds a replacement (US) investor. It's in the shareholder agreement.
Alaska knows that now.
WRONG!!!!! BR has
option puts as part of the original deal. They can execute at anytime!!!!! It does not require approval...if it did then that would lead to Branson calling the shots.
By Mary Schlangenstein
Bloomberg News
Virgin America, the airline partly owned by British billionaire Richard Branson, said U.S. investors retain majority control of the carrier and a new regulatory review isn't justified.
Virgin America urged the U.S. Transportation Department in a filing Friday to reject a Feb. 10 request from Alaska Air Group to hold a public hearing on whether the carrier is violating federal ownership rules.
Virgin America said its "robust and effective competition" prompted Alaska's request.
Alaska's filing was the latest clash between Virgin America and U.S. competitors. Virgin America said federal regulators addressed each of Alaska's concerns when they initially found in 2007 that the Burlingame, Calif.-based carrier to be in compliance with laws that bar foreigners from controlling U.S. airlines or owning more than 25 percent of voting stock.
"Virgin America has complied with all ongoing ownership, control and fitness requirements and required notifications," the filing said. "Virgin America will also continue to comply with all department notification requirements and to ensure its compliance with all ownership and control requirements."
Bobbie Egan, an Alaska Airlines spokeswoman, said she hadn't seen the filing and didn't immediately comment.
Alaska Air Group, parent of Alaska Airlines and regional carrier Horizon Air, said in February that cash obtained by Virgin America, its report of losses in 2008 and "recent media reports" raised "very serious concerns" that effective control of the carrier was "perilously close to reverting to the British Virgin Group."
Branson's London-based Virgin Group put up 25 percent of the initial $177 million investment to start Virgin America, as well as a $53 million loan. When Virgin America sought permission to fly in 2006, airline officials said U.S. investment firms Black Canyon Capital in Los Angeles and New York-based Cyrus Capital Partners controlled a 75 percent stake.
The Financial Times reported last month that Virgin Group hired Lazard Ltd. to recruit new investors on concern that Cyrus Capital and Black Canyon might exercise an option to recall their initial investment in Virgin America. That would leave Virgin Group as the sole shareholder in the closely held carrier, the newspaper said, citing unidentified people familiar with the matter.
The Transportation Department approved Virgin's application to begin flights "including the redemptive rights, because it was satisfied by the various restrictions that were placed on their use," the airline said in Friday's filing.
Also from USA Today:
Should either of the funds, Black Canyon Capital or Cyrus Capital Partners, exercise unusual "put" rights in their investment agreement with Branson's Virgin Group to start the airline, the Britain-based group would be forced to buy back the shares.