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Ansett: Fox/Lew Ask For $500m

Sun Nov 11, 2001 1:36 am

Lew-Fox ask for $500m


BUSINESSMEN Lindsay Fox and Solomon Lew are seeking government concessions valued at more than $500 million in their bid to buy Ansett.

The Melbourne tycoons want tax breaks, subsidies, loan guarantees and changes to aviation regulations that would effectively give them a monopoly on some routes.
The $3.6 billion deal announced by the Ansett administrators on Thursday is highly conditional on the support of creditors, the Federal Government and the Federal Court.

In other developments:

PILOTS said they had been "screwed" and they were considering a legal challenge which has the potential to result in creditors meeting to have the administrators sacked.

NO management team has been assembled by the Fox-Lew syndicate, despite its multi-billion dollar price tag.

ANSETT is losing money, with planes carrying between 30-50 per cent of capacity, when 62 per cent is needed to break even.

FOX-LEW plan to inject $400 million cash into Ansett to secure its future until the airline makes a profit, estimated to be within two years.

ADMINISTRATOR Mark Korda said he hoped to sell Ansett's regional airlines to coincide with the sale of the main routes by January 31. Several parties are bidding for each of the smaller airlines.

REGIONAL airlines would not be bought by the Fox-Lew syndicate, but Mr Lew said they might invest up to 20 per cent in some of them.

ANSETT'S market share has dropped from 39 per cent in September to less than 5 per cent as Qantas, with 90 per cent, swallows former Ansett customers.

Singapore Airlines, which has a consultancy agreement with the administrators to develop a business plan for Ansett, reconfirmed it would not take equity in Ansett.

Details of the Fox-Lew bid will be presented to a committee of creditors this week ahead of a full creditors' meeting next month. It is believed the administrators had sounded out major creditors before Thursday's announcement supporting Fox-Lew.

The Ansett Pilots Association is continuing with its bid and it might also be presented to the creditors.

The leader of the pilots' bid, Michael Jones, said he felt he had not had all the facts presented to him.

He claimed the Prime Minister's office was surprised that the administrators announced the deal on the eve of the election.

Mr Korda said on Thurs day that arrangements surrounding the $195 million would not prevent the Fox-Lew deal.

A spokeswoman for Mr Fox refused to comment.

* Canada's second largest airline, Canada 3000, has ceased operations after securing court protection from creditors, stranding thousands of passengers and putting some 4800 employees out of work.

The company had been trying to cut costs to secure a $57 million federal loan guarantee it needed to resolve a cash crunch triggered by the fall in passenger travel after the September 11 terrorist attacks in the US.

The announcement came just a day after the airline vowed to keep flying.

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