Virgin America, Owned by Pair of Hedge Funds, Faces Puts
19 month old Virgin America is owned by a pair of hedge funds/ private equity firms, Black Canyon Capital and Cyrus Capital Partners.
These funds seem to have negotiated some interesting "put" options when taking ownership of Virgin America. Virgin has had losses mount as the economy, and airline industry specifically, slow to decade old rates. Under the agreement, Virgin Group, Virgin America's European parent, would be forced to buy back the shares. However, under US law, domestic airlines must be majority owned by American companies. It remains to be whether either firm intends to exercise such options.
Black Canyon Capital is a Los Angeles based private capital firm focused on investing in control and non-control equity and structured debt securities. Cyrus Capital Partners is a New York based firm that "invests across the capital structure of leveraged companies throughout their life cycles, including those in financial distress, and seeks to generate attractive absolute returns that are not correlated to or dependent upon the general equity and fixed income markets."