A New England railroad company majority owned by a member of the wealthy Mellon banking family has agreed to buy Pan American World Airways, bringing a dose of long sought-after capital to re-energize the bankrupt Miami carrier, the airline said Wednesday.
Pan Am will present a reorganization plan to the U.S. Bankruptcy Court on May 6 for Guilford Transportation Industries, owned by chairman Timothy Mellon and president David Fink, to buy the airline's assets, including its three aircraft, operating certificate, name, logo, manuals, spare parts and a 30 percent stake in Pan Am Air Bridge, for $14.2-million; contribute an additional $9.3-million for administrative, priority and unsecured claims; and pump another $5-million of fresh capital into the airline. The deal does not include Pan Am's Doral headquarters, but does include its Fort Lauderdale maintenance base.
Colin Pease, executive vice president of Guilford of Billerica, Mass., said the company is committed to Pan Am, and takes a long-term approach to business.
He said it is too early to say whether Pan Am's headquarters would remain in South Florida, or whether the carrier would return to scheduled service. But Pease said the company expects to retain at least 100 Pan Am employees, and, in time, expand the airline.
Besides bankruptcy court approval, authorization from Pan Am's secured lender NationsBank, which has about $26-million outstanding to the company, is needed before the deal can be finalized. The bank, in turn, must deal with billionaire investor Micky Arison, who has given his personal guarantee, and could still be on the hook for millions of dollars.
The deal already has the support of the unsecured creditors committee.