Administration November 8, 2005

WI Fund Urged to Think Wisconsin in Start-Up Support

August 11, 2005 (PLANSPONSOR.com) - The Wisconsin Investment Board has agreed to up its investment in start-up companies located in the Badger State.
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Board members agreed at a meeting this week to consider increasing the percentage of the state’s $70 billion portfolio invested in Wisconsin-based investment opportunities to give emerging companies the financial backing they need to grow and produce new jobs, according to a WisBusiness.com news report.

Trustee James Senty said the board hopes to invest more in emerging technology companies, but must weigh that against earning the highest possible return for its investors.

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Starting five years ago, he said the board began putting money in four venture capital firms. To date, $135 million has been invested, though only $70 million has been used, according to the news report.

Tim Keane, head of the Marquette University Golden Angels Network investment group, told the investment board trustees that Wisconsin produces more than its share of ideas.

“Ideas are not the problem, though,” he said. “It’s how to find venture capital for companies worthy of investment. And there are many more of them than we’ve seen in a long time.” Last week, his group put $535,000 in eMetagen, a drug-development firm in Madison.

In addition to universities creating spinoffs, he said businesses like GE Healthcare can spawn new firms when scientists strike off on their own.  He also said deal flow is improving in the state.

“We are seeing ideas before they go elsewhere,” he said, lauding the efforts of the newly created Wisconsin Angel Network. “The environment is improving for venture capital deals,” he said. “And more entrepreneurs will come forward as the economy improves.”

Administration November 7, 2005

United Skipping Fall Pension Payment

July 23, 2004 (PLANSPONSOR.com) - Faced with restrictions due to a new financing package, United Airlines' parent company said it will not be able to make a scheduled pension payment this fall.
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UAL Corp announced it has successfully negotiated an agreement to amend its debtor-in-possession (DIP) financing credit facilities.   While the new deal provides the bankrupt airline with an additional $500 million in available funds, it prevents the company from making pension payments before its exit from bankruptcy, UAL said in a news release.

“The amended DIP agreement contains financial covenants that do not permit the company to make any payments inconsistent with its current financial projections,” the Chicago-based firm said. These covenants effectively prohibit “further pension contributions before exit, unless the lenders otherwise consent based on a modified business plan.”

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Thus, United “does not expect to make any pension contributions before exit because such payments would diminish the company’s liquidity and reduce flexibility, thus impairing the company’s ability to attract exit financing,” United said.   The company though reiterated the decision “does not affect the benefits currently being paid under these plans.”

“By amending the DIP and not making these pension contributions, the company believes it will have adequate funding until its exit from bankruptcy,” United said.

The current lenders of the DIP include JPMorganChase, Citigroup, and CIT, and a new lender, GE Capital.   The company will seek bankruptcy court approval of the amended DIP agreement at the omnibus hearing currently scheduled for August 20, 2004.

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