Banks Reconsidering Plan to Take American Trans Air Private

INDIANAPOLIS – Two banks that would finance a plan by American Trans Air parent Amtran Inc. to go private have asked the airline for more information, a sign that the move could be in peril.

But company founder J. George Mikelsons said he is still committed to the deal if he can obtain financing.

"I'm not looking to either cancel it or amend it. We're committed to the deal, but it always has been subject to financing," Mikelsons told The Indianapolis Star.

Citicorp USA and Salomon Smith Barney, which are to provide $175 million in credit, have asked for more information about the airline's condition, "financial or otherwise," Amtran said Thursday.

That should come as no surprise, given the terrorist-induced turmoil in the industry, Mikelsons said.

"Anybody who has a commitment outstanding to anybody in aerospace, the travel industry, the leisure industry -- good Lord, you can't blame them for taking a second look," he said.

Mikelsons, who owns 72 percent of Amtran's stock, has offered $23 a share to buy the remaining 3 million shares of the Indianapolis-based company. Amtran went public eight years ago at $16 a share. That offering helped Amtran grow its fleet and reduce debt.

Mikelsons said that going private allows the airline to continue its growth plans without having to meet the short-term expectations of Wall Street.

Shareholder votes on whether to go private are still scheduled to be tallied at the company's Oct. 10 annual meeting. Amtran stock closed up 3 cents at $8.18 a share Friday on the Nasdaq exchange. The stock had been trading around $22 before Sept. 11.

Apprehensive passengers are canceling trips. Although ATA resumed 80 percent of its flights since the nation's air fleet was grounded, the flights are only about half full, Mikelsons said.

The nation's 11th-largest airline has begun to furlough nearly 20 percent of its 8,000 employees, or about 1,500. The company employs 2,400 at its Indianapolis headquarters and aircraft maintenance base, where the layoffs could total nearly 500, based on the 20 percent figure the company has given.

The company has not specified exactly how many Indiana workers would be idled.