INDIANAPOLIS, Nov. 10, 2005 (PRIMEZONE) -- ATA Holdings Corp. (the "Company") (Pink Sheets:ATAHQ), the parent of ATA Airlines, Inc., today filed with the U.S. Bankruptcy Court a motion to approve an agreement in principle with private equity fund MatlinPatterson Global Opportunities Partners II ("MatlinPatterson") for debtor-in-possession ("DIP") financing in the amount of $30 million. In addition to DIP financing, MatlinPatterson has tendered a commitment to invest up to an additional $70 million in equity upon ATA's emergence from its Chapter 11 case. The financing is subject to U.S. Bankruptcy Court and government approvals and certain other customary conditions.
"MatlinPatterson's commitment represents a watershed event for ATA and will provide a firm basis for the sustainable reorganization of the Company," said Frank Conway, ATA Chief Financial Officer. "As a world-class investment management firm, MatlinPatterson has tremendous experience working with and investing in turnaround situations. We are confident they are the right partner to support ATA's future growth."
The agreement with MatlinPatterson would support ATA's continued operations in scheduled service, military and commercial charter operations. In connection with the anticipated MatlinPatterson investment and ATA's emergence from Chapter 11, ATA is also engaged in discussions with Southwest Airlines concerning their current codeshare agreement.
"MatlinPatterson's commitment to invest in ATA is a testament to the dedicated spirit of our employees and the sacrifices they have made," said ATA President and CEO, John Denison. "With the commitment for this capital investment, we are on the path to emerge from bankruptcy in early 2006."
Under the agreement in principle, MatlinPatterson would make $30 million in debtor-in-possession financing available following final approval by the Bankruptcy Court. ATA expects to seek final court approval of the DIP financing on December 6, 2005. Upon exit from Chapter 11, the $30 million DIP financing would convert into equity of the reorganized Company. In addition, MatlinPatterson would invest or backstop up to $70 million in additional equity, for a total equity investment of $100 million.
ATA Airlines is now in its 33rd year of operation. The carrier offers affordable travel to destinations such as New York, Dallas/Ft. Worth, Hawaii, Florida and Mexico. Through direct and connecting Southwest Airlines codeshare flights, ATA now serves customers in more than 60 markets. For more information, visit ata.com.
MatlinPatterson is a private equity firm specializing in control investments in distressed situations on a global basis.