Aloha bidding takes twist
Pacific Air Cargo
, a Los Angeles-based, woman-owned company, has emerged as the top bidder for Aloha Airlines
' contract aviation services unit during an auction held yesterday at the law offices of Bingham McCutchen LLP
in San Francisco, according to two people familiar with the proceedings.
They were unsure of the amount of the bid.
But bidding for the more profitable air cargo division took a twist when representatives for the leading bidder, Seattle-based Saltchuk Resources Inc., walked out of the auction and headed for the airport after the company's bid was topped, the two sources said.
Saltchuk representatives left after Aloha's primary lender, General Motors Acceptance Corp., which is first in line to get paid off by the company, raised the top bid to $20 million. The sources said they were unclear if that amount included approximately $5 million in Aloha's accounts receivable.
Saltchuk, the parent company of interisland shipper Young Brothers Ltd., had offered a starting bid of $13 million, plus an additional amount of about $5 million for accounts receivable. The cargo unit, which has 400 employees, carries 85 percent of the state's air cargo, as well as all U.S. Mail to Maui and the Big Island.
The cargo unit has generated earnings before interest, taxes, depreciation and amortization of more than $6 million in recent years, while the contract services unit is marginally profitable.
Pacific Air Cargo, founded in 2000, provides express air cargo service between Los Angeles and Honolulu, including service to Guam and Pago Pago, American Samoa, with Boeing 747 freighters.
The company, which shipped more than 80 million pounds of cargo last year, is headed by Chief Executive Beti Ward.
Aloha's contract services unit, which employs 1,050 people, handles ground operations for other airlines, such as ticketing and assisting passengers; baggage handling; directing planes to the gate; and cleaning the aircraft.
Late last week, Castle & Cooke Aviation Services, the privately held company owned by Dole Food Co. Chief Executive David Murdock, dropped out of the bidding for the cargo unit after saying it lacked sufficient time and opportunity to conduct its due diligence.
Castle & Cooke's withdrawal was disclosed yesterday in a motion filed by Aloha's unsecured creditors' committee in which the committee claimed that the expedited sale of the cargo unit skewed the process in favor of Saltchuk.
The committee is requesting new dates for the bidding, auction and sale approval. If the sale is permitted to go forward, it asks that no distribution of the proceeds be made to GMAC during a 60-day period during which the committee would have the right to investigate and challenge the liens and claims of GMAC, or until a plan is confirmed, whichever is later.
A hearing to approve the bidders will be held Thursday at the Northern District of California federal Bankruptcy Court in Oakland before Chief Judge Randall Newsome. He is presiding over the hearing because Honolulu Bankruptcy Judge Lloyd King is on vacation in Japan. King was the former chief judge in Oakland before moving to Honolulu and being replaced by Newsome.