Business news in brief
In the Region
Trump refinances about one-third of its debt
Trump Entertainment Resorts Inc. has refinanced about one-third of its debt on terms that give it more breathing room in dealing with lenders. The company said yesterday that it had paid off its loans with Morgan Stanley and obtained a new one for $493.2 million from Beal Bank Nevada. The key part of the refinancing is that the new five-year deal eliminates certain requirements restricting the firm's ratio of debt-to-earnings. The firm's stock had declined recently amid investor concern that declining revenue from a citywide slump in Atlantic City this year could push Trump Entertainment into default on its old loans. That could have affected completion of the long-awaited second tower at the Trump Taj Mahal Casino Resort, due to open around Labor Day weekend. The refinancing covers about one-third of Trump Entertainment's $1.5 billion debt; it does not cover the company's bonds. The $255 million hotel tower, a complement to the current hotel tower, is the key to the company's plans to generate more cash flow.
Checkpoint Systems names new CEO
Checkpoint Systems Inc. named Robert van der Merwe as president and chief executive officer, effective immediately. Van der Merwe, 55, succeeds George Off, 60, who will continue to serve as chairman. Van der Merwe is a former president and CEO of Paxar Corp., which was bought by Avery Dennison Corp. in June. Checkpoint, the Thorofare maker of electronic antitheft systems for the retail industry, also projected double-digit revenue growth in 2008 and forecast per-share earnings of $1.65 to $1.75. The announcement came after the close of trading on the U.S. stock market. Shares of Checkpoint closed at $22.71, down 62 cents.
- Bloomberg News
Company moving to Phila. records 3d-quarter loss
Luminent Mortgage Capital Inc., which is moving its headquarters from San Francisco to Philadelphia effective Tuesday, reported a net loss of $520.6 million, or $12.17 a share, in the third quarter. Most of the loss came from a $268.9 million decline in the value of mortgage-backed securities and a $138 million loss on the sale of mortgage-backed securities. Luminent specializes in buying mortgages given to borrowers who do fully document their income. It then issues securities backed by those mortgages. The company's reliance on short-term financing to fund those securitizations got the company into trouble last summer when credit markets froze. In the last year, Luminent's shares have plummeted from $10 to a close of 87 cents yesterday.
- Harold Brubaker
US Airways calling back 200 flight attendants
US Airways Group Inc. said it would recall about 200 laid-off flight attendants, 30 of whom will be based in Philadelphia, to prepare for the 2008 summer travel season and to compensate for retirements and attrition. That will boost the carrier's Philadelphia total to about 2,056. The remaining 170 flight attendants will be based in Boston; Charlotte, N.C.; Washington-Reagan National Airport; and New York-LaGuardia Airport. The recalls, all effective Feb. 15, will boost US Airways' current flight-attendant total of 6,976 by 2.9 percent. The airline currently has 868 flight attendants on involuntary furlough from the early 2000s, when it was cutting costs and going through bankruptcy twice. US Airways said 330 had already been recalled.
- Paul Schweizer
Endo pays $50 million to develop inhalant system
Endo Pharmaceuticals Holdings Inc., Chadds Ford, said it was paying about $50 million for the exclusive North American rights to develop and sell Alexza Pharmaceuticals Inc.'s inhalant system to deliver a painkiller to cancer patients. Endo paid $10 million up-front for the exclusive rights to Alexza's AZ-003, a handheld inhaler to administer the painkiller fentanyl, according to a statement. Endo agreed to an additional $40 million for reaching certain regulatory milestones and will also pay an undisclosed amount in royalties on sales of AZ-003.
- Bloomberg News
Dollar Financial buys seven stores in Britain
Dollar Financial Corp., a check casher and short-term lender, said it had completed its purchase of seven stores in the United Kingdom, bringing its global network to 1,445. The Berwyn company said that it paid $3.5 million and that it expected the stores to bring in about $2.4 million in annual revenue. For the year ended June 30, Dollar Financial reported $410 million in revenue.
- Harold Brubaker
Sallie Mae shares drop 11.2 percent
Shares of student lender Sallie Mae sank yesterday, a day after it said it would sell $2.5 billion in stock to settle unprofitable contracts that require it to buy back shares at above-market prices. The company, officially known as SLM Corp., also disclosed in offering documents that federal education officials plan to examine whether the company's billing practices complied with federal law. It also said it faced a lawsuit seeking class-action status in a Connecticut federal court alleging that it steered minority students into more expensive loans. It denied the allegation. Shares fell $2.48, or 11.2 percent, to close at $19.65.
Boeing closes deal for jets to British Airways
Boeing Co. said it made final a deal with British Airways P.L.C., notching 790 orders for its long-awaited 787 Dreamliner plane during the last three years. British Airways ordered 24 planes and placed options for 18 more and purchase rights for an additional 10. The British Airways deal is worth $4.4 billion at list prices, though carriers usually negotiate deep discounts on sizable orders.
Deloitte & Touche to pay $38 million in settlement
The accounting company Deloitte & Touche L.L.P. has agreed to pay $38.25 million as part of a $325 million settlement of investor claims of misconduct by Delphi Corp. and those that oversaw its finances. Delphi is the nation's largest auto-parts supplier. It filed for bankruptcy protection in 2005, acknowledging that hundreds of millions of dollars in earnings that it had claimed since General Motors Corp. spun it off in 1999 were invalid. Deloitte & Touche served as Delphi's outside accountant.
Manufacturer of the Yugo to be sold next year
Serbia's only carmaker and producer of the much-maligned Yugo will be sold next year, the government said. In an advertisement published in the Politika daily, Serbia's Privatization Agency said nearly 90 percent of the company's shares would be sold in April. Zastava, based in the central city of Kragujevac, first exported the Yugo to the United States in 1986, where it sold for less than $4,000. The Yugo was derided by critics, including Consumer Reports magazine, which said it "barely qualified as a car." The Yugo was removed from the U.S. market in the early 1990s after U.S. sanctions against Yugoslavia and Zastava faltered as the nation plunged into civil war.
Weather again forces United Airlines cancellations
United Airlines, hit hard by weekend storms in the Midwest, canceled dozens of flights yesterday as the second storm since Christmas threatened to pile 20 inches of new snow on Colorado. United canceled 168 flights nationwide mostly because of the weather in Denver, its second-largest hub, to help prevent planes from being stranded there. That's about 5 percent of the airline's daily schedule.