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KLM-NWA DEAL COLLAPSES; NORTHWEST TURNS TO BANKS

 KLM-NWA DEAL COLLAPSES; NORTHWEST TURNS TO BANKS
 DALLAS, Nov. 9 /PRNewswire/ -- The proposed injection of up to


$500 million by KLM Royal Dutch Airlines into Northwest Airlines agreed to last month by KLM chairman Peter Bouw collapsed late Thursday, when KLM's supervisory board refused to ratify the agreement, writes the trade magazine Commercial Aviation Report.
 The deal fell through less than one day before Northwest was to announce the pact to its syndicate of banks that had financed the 1989 leveraged buyout of the airline. Instead, NWA asked the banks at a meeting in Minneapolis to defer more than $200 million in principal due next year and reschedule it over the balance of the term, maturing in 1997, reports the magazine.
 Northwest also asked the banks for a one year "special term loan" of $300 million. NWA has fully drawn down its $600 million revolving credit, which it has historically used to fund losses during the seasonally weak winter months. NWA's lead lender, and an equity holder, Bankers Trust Co., has committed itself to $50 million for the new loan and has asked other banks to volunteer the balance. A Nov. 27 deadline has been set for commitments, writes Commercial Aviation Report.
 NWA's Gary Wilson, one of the major investors and leaders of the LBO, told bankers that officials are now looking for new equity from parties other than KLM.
 Although NWA officials painted an optimistic picture during the bank meeting, say those in attendance, they say that Bankers Trust officials conclude that without the loan, Northwest will be out of cash within 60- 90 days. Bankers Trust also told the lending syndicate that two big financings NWA has been working on -- a $200 million receivables deal and a $700 million aircraft pool financing -- have also collapsed, at least for now.
 KLM apparently withdrew when its own losses appeared to be mounting, in part because of Northwest's losses and those of another KLM investment in the French carrier Air Littoral. KLM has already written off half of its $400 million investment in Northwest and suggested last week that further write offs will be forthcoming.
 -0- 11/9/92
 /CONTACT: Scott Hamilton of Commercial Aviation Report, 214-484-9500/ CO: KLM Royal Dutch Airlines; Northwest Airlines ST: IN: AIR SU: TNM


SB -- NY042 -- 8713 11/09/92 12:36 EST
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Publication:PR Newswire
Date:Nov 9, 1992
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