Pinnacle Airlines secures final approval of $74.3 million DIP loan

By Caroline Salls

Pittsburgh, May 16 - Pinnacle Airlines Corp. has received final approval from the U.S. Bankruptcy Court for the Southern District of New York for $74.3 million in debtor-in-possession financing being provided by Delta Air Lines, Inc., according to a company news release.

"Combined with cash from our ongoing operations, this funding will be available to help ensure that Pinnacle has sufficient liquidity to meet its operational and restructuring needs," Pinnacle president and chief executive officer Sean Menke said in the release.

"This is an important step in our ongoing efforts to develop a viable business plan, while continuing to provide passengers with safe, reliable and timely service."

The company said $44.3 million of the DIP financing will be used to repay a secured promissory note held by Delta. The remaining $30 million will be available to fund operations during the restructuring process.

As previously reported, the DIP facility will mature on the earliest of one year from the bankruptcy filing date, the completion of a sale of substantially all of the assets of any obligor, the effective date of any Chapter 11 plan of reorganization of any obligor, and the acceleration or termination of the DIP loans.

Interest will be 12½%.

Pinnacle, a Memphis, Tenn.-based operator of a regional airline, filed for bankruptcy on April 1. The Chapter 11 case number is 12-11343.

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