Two major ExpressJet shareholders increased their investments this month in the Houston-based regional airline.
Swiss bank Credit Suisse, which filed its initial statement of ownership of ExpressJet stock Aug. 29, reported Tuesday that it owns 13.8% of the regional carrier.
Quattro Global Capital reported the next day that it owns 11.8% of the stock. In mid-August, the firm reported owning about 9% of the stock. Based in New York, the asset-management firm specializes in hedge funds designed to generate strong returns by focusing on global arbitrage convertible transactions.
The stock increases come just before a scheduled Oct. 1 ExpressJet shareholders vote on a 1-for-10 reverse split of common shares to boost the shares over $1 to avoid a delisting.
During a call with ExpressJet executives in August to review second-quarter 2008 results, analysts questioned the airline's move to use shares to redeem outstanding notes instead of dipping into some of the $155 million in cash ExpressJet said it had or was renegotiating with bondholders. Using the shares diluted the stock, analysts pointed out.
"Where the industry is right now, access to capital is very uncertain," ExpressJet CEO James Ream told analysts. "We were in conversations with the bondholders, and they obviously wanted a lot more cash than the board was comfortable to give up."