determined2fly

does anyone know if NWA still holds shares in CAL? Last I heard they had a 14% share. Thankyou.

Eric Stratton

I've heard that it is 1 share. a golden share as people call it, that has some kind of merger veto power.

it's definately not 14%

jtf560

I'm just curious here- what were the circumstances behind NWA getting the golden share or shares or whatever they were? I wonder how much money Unitied will have to pony up to NW to get permission to merge/ acquire CO if things keep moving forward there. It could be an interesting little soap opera.

reddog25

During CAL exit from their last bankruptcy (I've lost track on how many that was) NWA bought controlling interest in CAL (Too funny...we had $$ back then). DOJ or some gov't agency made us sell the controlling stock (probably made more $$ off that) with the caveat that NWA would own the 'golden share'. Basicly 'first rights of refusal' in the event some other company wanted to buy CAL. I'm sure that right is negotiable (since all of a sudden we're broke). Ahhhh what a strange game this airline business....S/F Reddog

Andy

The golden share disappears with reorganization. NWA's emergence will kill the golden share. This was discussed on usaviation.com a while ago.

reddog25

Oh then it musy be true! Why would that disappear with reorganization? It's not a Debt...It's an asset..........I'd be surprised if it went away, it's an asset that can be sold to the highest bidder of CAL.

YAKflyer

Don't think you are quite right there. There is nothing about reorganization that changes the specifics of that share. The share is an asset that NWA owns. It provides NWA the option to veto anybody else from taking over CAL. What it does not do is prevent CAL from taking over another airline, kind of like a one way street. With the share in place (assuming NWA would oppose a deal) the only way for CAL to merge is to have CAL take over the other company.

757Driver

Right on the money. RD and Yak are right. This share remains in place in or out of BK and does not prevent CAL from being the acquirer.

Andy

You need to read the Master Alliance Agreement. Note that "change of control" gives Continental the right to terminate the agreement. A plan of reorganization (required for emergence from Chap 11) triggers a change of control.



Section 4: Master Alliance Agreement

iii Additional Termination Rights

(a) In the event of a NW Change of Control, each of CO and NW shall have the right to terminate the Master Alliance Agreement on 6 months' prior written notice, without liability or penalty to the other party.


(d) For purposes of this term sheet, a "Change of Control" with respect to either NW or CO shall mean any merger, reorganization, share exchange, consolidation, business combination, recapitalization, liquidation, dissolution or similar transaction involving NW or CO, or any sale or disposition of all or substantially all of NW's or CO's airline assets on a consolidated basis, involving, or the acquisition of beneficial ownership of 25% or more of the equity securities or voting power of NW or CO by, a third-party air carrier or carriers with annual passenger revenues in any such carrier's most recently completed fiscal year in excess of $1 billion, or an affiliate of any such third-party air carrier(s), or the execution of definitive agreements in respect of any such transaction.

reddog25

I'm no lawyer, just a Marine, so I may be wrong. However I believe the Master Alliance Agreement is the 'code share' agreement, not the golden share. That was provided in exchange for NWA selling the majority stake in CAL...2 seperate animals.....shot over................