Northwest Airlines' parent company, NWA Inc., moved a step closer to getting a $300 million emergency loan to keep it out of bankruptcy court.
KLM Royal Dutch Airlines agreed to provide $50 million of the financing, matching an earlier pledge by Bankers Trust Co., NWA's lead bank.
Both commitments are conditioned on NWA's ability to raise the remainder of the financing from its banks, suppliers, its labor unions, investors, or some combination thereof.
While the target remains $300 million, the minimum amount that must be raised has been reduced to $250 million.
KLM and Bankers Trust are equity holders in NWA and could see their investments virtually wiped out if the company files for protection from its creditors under Chapter 11 of the bankruptcy code.
ABN Amro Could Join
Still, KLM's decision to pony up the $50 million could help persuade Dutch banking giant ABN Amro Bank, a co-agent in NWA's bank group, to do the same.
ABN was a co-agent on the original buyout loan for NWA, mainly because KLM was a member of the investor group.
The official deadline for commitments on the new financing is Nov. 27.