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Finova agrees to sell aviation assets for $45 million
By Caroline Salls
Pittsburgh, Jan. 18 - The Finova Group Inc. entered into a definitive agreement to sell some of its aviation assets for $45 million to Compass Capital Corp. affiliate FAP, LLC, according to an 8-K filing with the Securities and Exchange Commission.
The purchased aviation assets included 15 aircraft either owned by Finova or which secure financing obligations and eight owned engines.
Proceeds from the sale will exceed the company's Sept. 30 carrying value of these assets by about $11 million, according to the release, and the sale is expected to take place in multiple closings, with the first of these closings expected by Jan. 31.
The sale proceeds will be used to fund internal cash reserves and debt service.
As a result of the sale and the continued wind down of Finova's affairs, senior vice president and transportation group manager James M. Wifler is expected to leave the company by the end of the first quarter of 2007.
In addition to this departure, Finova said it has other scheduled employee reductions that are expected to occur by the end of April.
By the end of April, the company said it expects that it will have reduced its workforce by roughly 88% from the workforce reported at Sept. 30.
The termination benefits, including severance costs, for the personnel departures are expected to cost $4.6 million, $3.9 million of which was accrued as of Sept. 30.
Scottsdale, Ariz.-based Finova is a financial services holding company that emerged from Chapter 11 bankruptcy in 2001 in the U.S. Bankruptcy Court for the District of Delaware. The case was reopened in December to facilitate asset sales and dissolution of the company. The Chapter 11 case number is 01-00697.
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