Hawaiian Air Investors Tell Finance Plans : Newport Group’s Strategy Includes Secured Bank Loan

The Newport Beach investment group seeking to acquire Hawaiian Airlines plans to pay for the deal with a Security Pacific Bank loan secured largely by the assets of the airline and its parent, HAL Inc. of Honolulu, HAL Chairman Jack Magoon Jr. said Monday.

Although HAL leases most of its aircraft, it has a variety of real estate holdings in Hawaii, including a small airport in Maui’s popular North Shore vacation area.

The investor group, HAL Acquisition Inc., is headed by Newport Beach lawyer and longtime airline executive J. Thomas Talbot and former baseball commissioner Peter V. Ueberroth.

The bank gave its tentative approval to the financing arrangement after all five of Hawaiian Airlines’ unions--which represent 83% of the carrier’s 3,000 employees--approved a new five-year contract Friday.

The unions agreed to accept a 36-month wage freeze for improved job security and a promise of raises in the final two years of the contract. The acquisition was contingent on the concessions by the unions.

Security Pacific said its loan is dependant on changes being made to certain conditions of the acquisition deal worked out by HAL and the acquisition group. Magoon, who owns 56.9% of HAL Inc., said that the conditions imposed by Security Pacific do not appear to be major and that, from his perspective, the deal is moving along smoothly.

$22 a Share Offered

The Talbot group has offered to pay $22 per share, or a minimum of $21.9 million for 51% of HAL’s common stock, to obtain control of the struggling airline. Talbot could not be reached for comment Monday.

He said Wednesday that 68% of HAL’s stock had been tendered to his group. Magoon said Monday that the total now is “a lot higher” but was unable to provide specific numbers. It would cost the Talbot group about $43 million to acquire all 1.9 million shares of HAL common stock.

Magoon said directors were to decide Monday on a date in early November for a special shareholder meeting to vote on the airline’s sale and on a date several days later “to close the transaction.”

The shareholder meeting tentatively had been scheduled for Oct. 23, but delays in submitting HAL’s proxy statement to the Securities and Exchange Commission pushed things back about two weeks, Magoon said.