News: Legal paperwork delaying Ansett deal

Old Feb 25, 02, 7:15 pm
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News: Legal paperwork delaying Ansett deal

Legal paperwork delaying Ansett deal
Leonie Wood
February 26 2002

Speculation is growing that delays in finalising agreements with airport owners and aircraft lessors may jeopardise Tesna's proposed $500million purchase of Ansett.

Despite the insistence of Tesna's founders Solomon Lew and Lindsay Fox that they will complete the deal to relaunch Ansett, they are struggling to tie up all the loose ends before the deadline of midnight Thursday.

Ansett's administrators, Mark Mentha and Mark Korda of accounting firm Andersen, yesterday said several elements of Tesna's deal, relating mostly to third parties, were yet to be finalised. They attributed the delays to legal paperwork.

Thousands of jobs hinge on the sale's completion, with Tesna expected to take on up to 3000 workers for Ansett's intercapital operations. Many other businesses that have agreed to supply a range of services to Ansett, such as catering and cleaning, also would be forced to cut back their business plans and employees.

"This is a painstaking process, and it is taking a long time," Mr Korda said. "It has been three or four months now, and it is looking as good as it has ever looked."

Tesna missed its initial deadline of January 31 after failing to secure crucial leases in time. But many financial analysts thought Tesna delayed its bid to avoid carrying Ansett's losses during February, traditionally the weakest month in the aviation year. Tesna sources yesterday said that Mr Fox and Mr Lew were "absolutely" committed to the deal, and that their US-based equity partners were unswerving in their support.

Mr Korda said the administrators would hold firm to their self-imposed deadline: "We have drawn a line in the sand, and it is February 28. We have got no reason to believe that anybody is playing any games behind the scenes - we are trying to get this deal completed."

Ansett's administrators and Tesna yesterday claimed one of the last hurdles was the documentation of a lease agreement with the Federal Government-owned Sydney Airport Corporation Ltd.

On February 14, Tesna and SACL reached an in-principle deal covering key issues relating to Tesna's proposed lease of the Ansett terminal at Mascot. The deal required Tesna to pay hefty bonds, and opened the door for other airlines to use gates at the terminal with Tesna's consent. But the documentation has not been signed.

Mr Korda also said he believed Tesna and SACL were "working around the clock to get the legal documentation in place".

SACL yesterday denied it was delaying the deal. "We are ready to sign concurrently with (Tesna's) deal with the administrators," a spokesman said.

Yet the administrators have left open the possibility of launching a further application in the Federal Court this week. Simon Whelan, QC for the administrators, told Justice Susan Kenny that if the further application were pursued, the administrators would return to the court tomorrow or Thursday.

As reported in The Age, Ansett's administrators yesterday decided not to proceed with plans to seek court approval for the sale, saying it was not necessary.

A second application, relating to a dispute between the administrators and Tesna about whether the deal included property belonging to third parties, was resolved yesterday morning.

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