Minesapint
9th Dec 2002, 15:04
So lets see then.
One of the biggest operators goes bust with debts of $1Bn. NATS debt = £1.4Bn or $2.1Bn. United can sell aircraft and other assets to clear debts. What assets does NATS have to sell to clear debt and remain in business?
Iron City
9th Dec 2002, 15:34
United is filing for Chapter 11 protection from creditors and reorganization, not going out of business just yet.
So they don't need to sell assets neceessarily , though they will to change their cost structure.
The key to it all is cash flow...generating enough cash to pay the mortgages and operating expenses (like debt service). What got done to NATS was a common thing with .coms and other technology shell games in the 1990s. The highly leveraged purchase works fine as long as the cash flow is there to service the debt and you get out and sell your shares before the music stops. The music stopped in the airline business about 2 years ago and NATS is caught in it. Regardless of the financial deal the UK needs NATS and will have to pay for it.