Mesa trades debt for stock

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matt152

Well-Known Member
PHOENIX, Jan. 7 /PRNewswire-FirstCall/ -- MESA AIR GROUP, INC. (Nasdaq: MESA) today announced that at a special meeting held on January 6, 2009, its shareholders approved an increase in the number of authorized shares of common stock from 75,000,000 shares to 900,000,000 shares, as well as the issuance of shares of common stock to satisfy Mesa's obligation to repurchase up to all of its outstanding senior convertible notes due 2023 and senior convertible notes due 2024 in the event that noteholders exercise their right to require Mesa to repurchase their notes.
<O:p
"We are pleased that our shareholders approved the increase in the number of authorized shares of common stock and the use of common stock to satisfy our note repurchase obligations," said Jonathan Ornstein, Mesa Air Group Chairman and Chief Executive Officer. "This approval gives us the flexibility to use common stock in lieu of cash to repurchase notes in the event note holders exercise their put rights. We appreciate our shareholders giving us this flexibility while we continue to discuss a number of options with our bondholders," added Ornstein.<O:p></O:p>
 
The terms of the bond state that the bondholders can force Mesa to buy the notes back early (they mature in like 2020), but it also says that if Mesa choses they can pay in stock. It doesn't matter if the note holders want cash, they have to accept shares per the agreement. Reading the 10k it says that the value of the stock is determined by a 5 day average. So what JO is saying is that 'Here, we can issue you 400 million shares... or we can work something else out.'

It's a way to convince them not to excercise their put option -- of course if they do they immediately become majority owners of the company. Even if they issue 400M shares and the price comes down to like 0.02 or something, he could do a 100:1 reverse split and bring the price to $2.00. Kind of screws over all the other share holders though, but they might think this is a better option than bankruptcy where they know they will get zero.
 
Yeah, if this actually happens any mom and pop shareholders are going to get diluted into nothing.

Sorry for posting this again; I missed the original.
 
31 million Q4 loss huh?

So I hear they had 60 million in the bank back in October.

Another 30 million loss and it'll be bad news bears.
 
surreal1221 said:
31 million Q4 loss huh?

So I hear they had 60 million in the bank back in October.

Another 30 million loss and it'll be bad news bears.
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Nah, they'll just issue more stock. Or maybe they can apply for a government bail out.


I don't think JO is really concerned about shareholders' stock being worthless. He's more concerned about his motorcycle payment. He can't make that payment if Mesa goes TU, so he'll do what it takes to keep them around. Doesn't matter who gets the shaft. Shareholders, pilots, ground employees. They're all secondary to his Harley.
 
He's more worried about losing money on the hotel he owns that houses people in training.

The guy is a #### (inserted by self) and needs to be gone, and that includes all the auxiliary components that are in place because of JO.
 
It's a sign of a company that's desperate to stay afloat.

As for the mom and pop "investors" who bought Mesa stock, all I can say is that a fool and his money are soon parted.

It's funny. Just a few years ago, some airline magazine awarded Mesa the regional carrier of the year award. It was going to go to Pinnacle but after the incident where an RJ turned into a lawn dart, the powers that be changed their minds.

You could say the management at Mesa has turned the company's stock into a lawn dart.
 
kellwolf said:
Nah, they'll just issue more stock. Or maybe they can apply for a government bail out.


I don't think JO is really concerned about shareholders' stock being worthless. He's more concerned about his motorcycle payment. He can't make that payment if Mesa goes TU, so he'll do what it takes to keep them around. Doesn't matter who gets the shaft. Shareholders, pilots, ground employees. They're all secondary to his Harley.
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Cash is King. Once the cash is gone, they have nothing. There isn't enough credit or stock investors to go around for survival, even in a good economy. About the only hope they'd have is for someone to buy them.
 
falconvalley said:
Cash is King. Once the cash is gone, they have nothing. There isn't enough credit or stock investors to go around for survival, even in a good economy. About the only hope they'd have is for someone to buy them.
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Don't give Phil any ideas. We already bought one.
 
surreal1221 said:
He's more worried about losing money on the hotel he owns that houses people in training.

The guy is a #### (inserted by self) and needs to be gone, and that includes all the auxiliary components that are in place because of JO.
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I nearly got mugged because they put me here once and I was stupid enough to leave to get something to eat after 4PM. Then when I got back I was worried about getting mugged by whatever creatures live inside the rooms.
 
SpiraMirabilis said:
I nearly got mugged because they put me here once and I was stupid enough to leave to get something to eat after 4PM. Then when I got back I was worried about getting mugged by whatever creatures live inside the rooms.
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