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KLM TO INVEST $500 MILLION IN NORTHWEST

 KLM TO INVEST $500 MILLION IN NORTHWEST
 DALLAS, Nov. 4 /PRNewswire/ -- KLM Royal Dutch Airlines has agreed


to invest up to $500 million in financially ailing Northwest Airlines, the trade finance magazine Commercial Aviation Report says in its Nov. 15 issue.
 The amount is in the form of a $250 million secured loan and $250 million in new equity.
 The secured loan may be converted to equity, perhaps in June, at which time it is understood that the top management may be replaced. A large number of former officials of Continental Airlines or its affiliates are already on payroll with or consulting to NWA. Michael Levine, now executive vice president of marketing, is widely touted as NWA's next president.
 Northwest is expected on Nov. 6 to ask its syndicate of some 50 banks involved in the 1989 leveraged buyout to reschedule, restructure or defer principal payment on its remaining $1.2 billion in long-term debt associated with the LBO. Nearly $250 million comes due next year, and more than $330-$340 million in each of the next three years.
 The co-agent banks were notified of the KLM agreement, reached at the end of last month, and of the plan to seek a debt revision at a hastily called co-agent bank meeting on Nov. 2, the magazine reports.
 Commercial Aviation Report notes that the KLM loan and investment, subject to conditions, comes at a critical time for NWA. It has tapped out its $600m revolving credit facility, which it relies upon to take it through the seasonally poor cash flow period of the winter months. The credit agreement requires that the RC be reduced at set intervals.
 The KLM deal would also appear to go toward satisfying a condition imposed by the Air Line Pilots Association in exchange for its agreement to invest $300 million in NWA over three years. ALPA conditioned its investment on additional monies by existing shareholders. ALPA also called for a restructuring of NWA's financial obligations, and the request of the banks by NWA for this would appear to satisfy this condition. There are several other conditions that also must be satisfied before ALPA will proceed with its investment.
 -0- 11/4/92
 /CONTACT: Scott Hamilton for Commercial Aviation Report, 214-484-9500/ CO: KLM Royal Dutch Airlines; Northwest Airlines ST: Texas IN: AIR SU:


LR -- NY033 -- 2449 11/04/92 11:39 EST
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Date:Nov 4, 1992
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