This article from NYTimes.com has been sent to you by psa188@xxxxxxxxx U.S. Investment Firm Considers Buying Stake in Air Canada April 4, 2003 By COLIN CAMPBELL TORONTO, April 3 - The Texas Pacific Group, the private investment firm, said yesterday that it was considering buying a stake in Air Canada when it emerges from bankruptcy protection in coming months. "There have been some preliminary discussions," said Owen Blicksilver, a spokesman for Texas Pacific, which typically takes controlling stakes in struggling businesses and works with executives to revamp them. "This is at a very early stage." The firm has a history of investing in airlines. It took control of Continental Airlines after it twice filed for bankruptcy in the 1990's and invested in America West during its restructuring in 1992. Last year, the firm lost a bid to take control of US Airways. "The franchise is good," Mr. Blicksilver said of Air Canada. "The management have done a good job under difficult circumstances. Under the right circumstances it could be a good investment." Last summer, Texas Pacific had talks with Air Canada about a possible investment in the airline, but they did not produce a deal, according to a person close to the talks. Air Canada was granted bankruptcy court protection on Tuesday. While the airline has a 70 percent share of the market in Canada, it has struggled with a heavy debt load that now totals $8.8 billion, high labor costs and stiff competition from low-cost airlines. The airline's troubles grew worse two years ago after it bought a competitor, Canadian Airlines. More recently, the outbreak of war in Iraq and the appearance in Canada of the illness known as severe acute respiratory syndrome have hurt the business. Shares of Air Canada fell 54 percent in Toronto on Wednesday and closed today at 87 Canadian cents a share, down 9 cents. In trying to cut its debt and labor costs, Air Canada has proposed selling pieces of its business, including its maintenance and technical arm, and said last month that it would cut 3,600 jobs. Texas Pacific is not the only company to have expressed interest in Air Canada. Other potential investors have had discussions with the airline, a lawyer representing Air Canada in bankruptcy proceedings said in court on Tuesday. He did not identify them and Air Canada would not comment today on whether it was in talks with any potential investors. One potential roadblock to the purchase of a large interest in Air Canada by an American company is a Canadian law that limits foreign ownership of airlines to a 25 percent voting stake. "Texas Pacific is aware of the regulations," Mr. Blicksilver said, but he declined to say whether it would affect Texas Pacific's plans. http://www.nytimes.com/2003/04/04/business/worldbusiness/04CANA.html?ex=1050466376&ei=1&en=15bead99f59aa229 HOW TO ADVERTISE --------------------------------- For information on advertising in e-mail newsletters or other creative advertising opportunities with The New York Times on the Web, please contact onlinesales@xxxxxxxxxxx or visit our online media kit at http://www.nytimes.com/adinfo For general information about NYTimes.com, write to help@xxxxxxxxxxxx Copyright 2003 The New York Times Company