AirTalk.org

Kingfisher · Guest

Virgin America Inc.

The company, with branding and financial ties to British entrepreneur
Richard Branson's Virgin Group, has made significant changes to its original
proposal, which the US Transportation Department rejected on December 27.
Under the US law, foreign investment in an airline is limited to 25 percent.

As per the information available, among changes submitted by
Burlingame-based Virgin America included:

· Virgin Group, the London-based company that helped finance the airline,
will drop a board seat and surrender veto rights regarding the airline's
operations;
· Virgin Group will place its voting shares in a trust with a
federally-appointed trustee;
· US private equity firms Cyrus Capital Partners and Black Canyon Capital,
who contributed about half the airline's $177 million in startup capital,
will limit investors to US citizens only; and
· Virgin America's board is prepared to fire chief executive officer Fred
Reid, an airline veteran hired by Branson, if the US Department of
Transportation finds it necessary.

"Changes to the company structure and investor agreements are extensive and
demonstrate the extent to which Virgin America and its investors are
prepared to go to get the airline approved," the company said in a
statement.

According to Reuters, regulators in December also cited the pervasive
involvement of Virgin Group and its executives in the creation of Virgin
America, and found the new carrier would probably be controlled by Branson
and his interests. Virgin Group committed $88.4 million in debt and equity
financing -- slightly less than one-half of the company's start-up financing
of $177.3 million. The debt agreements show Virgin America's survival is
contingent on Virgin Group financing, the Transportation Department said.

--

Our Homepage

http://mysite.verizon.net/resot1sy/fishersofflorida/