Gulfstream International Begins Restructuring Under Chapter 11
Nov 04, 2010
FORT LAUDERDALE, November 4, 2010 — Gulfstream International Group, Inc. (NYSE Amex: GIA) today filed for voluntary financial restructuring under Chapter 11 of the U.S. Bankruptcy Code in order to restructure its debt and secure long‐term financing. Gulfstream International Airlines flights and passengers are unaffected by the filing in U.S. Bankruptcy Court for the Southern District of Florida.
“We are operating our full schedule of flights and honoring all tickets and reservations,” said David Hackett, Gulfstream President and CEO. “Our passengers and employees are not impacted by this legal filing.”
Gulfstream said it had arranged up to $5.0 million in debtor-in-possession (DIP) financing from Victory Park Capital Advisors (Victory Park), an alternative asset management firm with headquarters in Chicago, subject to court approval.
“This represents the first step in securing the right long-term financing, which would allow us to acquire our fleet of aircraft, improve our cost structure and position us for future growth,” Hackett said.
“This restructuring with the new capital investment by Victory Park means that Gulfstream will be much stronger than today.”
Gulfstream asked the bankruptcy court to allow it to pay all of its approximately 600 employees any prepetition wages and continue all wage and benefit programs. The company does not anticipate any layoffs directly related to the filing.
Gulfstream operates 23 Beechcraft 1900D, 19-passenger aircraft with more than 150 daily flights to 18 destinations in Florida and the Bahamas and 6 destinations from Cleveland, Ohio, under the Department of Transportation’s Essential Air Service Program.
“While we have seen strong year-over-year improvements, the impact of our borrowing in the last several years to cope with consistently high fuel costs and the economic impact of declining traffic made it too difficult for the company to continue to meet its debt repayment needs,” Hackett said. “Essentially, the company needed additional financing and investment in order to continue to meet debt requirements and fund current operations. Gulfstream received strong interest from a number of investment sources; however all of them noted the need to restructure the balance sheet through Chapter 11 prior to making those investments.
“We are committed to maintaining business as usual, including the highest standards of safety and operational reliability,” Hackett said. “Gulfstream’s employees are the best in the business and give their all every day. Our intent is to use the restructuring process to strengthen our company to ensure a great future for our employees.”