UnitedChicago
Veteran
- Aug 27, 2002
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Excerpts from the WSJ:
The delay also comes amid growing unease among creditors over interest from private-equity funds in potential investments in UAL. But the interest is preliminary and UAL continues to pursue a reorganization financed solely by debt.
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The tasks include: working out new financial terms on about 130 jetliners it leases from investors; finalizing terms of a planned $2.5 billion debt-based exit-financing package; and determining whether it would need to augment that funding with a rights offering or minority private-equity investment.
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In the past few months, a number of private-equity firms and hedge funds have expressed interest in participating in the airline's refinancing. People familiar with the matter said private-equity firm Ripplewood Holdings LLC is among the firms studying the possibility, should the airline depart from its stated preference for sticking to a secured, all-debt package.
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But the preliminary interest may hinge on investing opportunities that could pop up if either Delta Air Lines or Northwest Airlines files for Chapter 11, which both have warned they may do, said one person familiar with the matter. An investor group led by Ripplewood currently is in a battle with Whirlpool Corp. over which will get to acquire Maytag Corp.
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After providing its business plan to UAL directors last week, the company gave the plan to all four institutions. A person familiar with the matter said the airline may win financing commitments by the end of this month. The four "all are actively in the running," this person said. The aircraft lease negotiations continue and UAL is exploring its options for raising junior capital should that be necessary, but it isn't actively pursuing that path at the moment, this person said.
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But it is not certain the creditors committee will agree to support UAL's new timetable, especially if it doesn't feel the company has made enough progress on the aircraft-leasing negotiations or exit-financing by the Aug. 26 hearing.
Such tension is commonplace in bankruptcies. The unsecured creditors normally prefer that new money coming into the reorganized company be debt rather than equity, which lessens the amount left to pay their claims. In United's case, the creditors committee includes representatives of its largest unions, airplane manufacturer Airbus, bondholders, some suppliers and vendors, and the Pension Benefit Guaranty Corp., a federal pension insurer that is in the process of taking over all four of the airline's underfunded pension plans.
I'm sure many of you will now claim how all of this supports what you've been saying all along, blah blah blah
The delay also comes amid growing unease among creditors over interest from private-equity funds in potential investments in UAL. But the interest is preliminary and UAL continues to pursue a reorganization financed solely by debt.
--
The tasks include: working out new financial terms on about 130 jetliners it leases from investors; finalizing terms of a planned $2.5 billion debt-based exit-financing package; and determining whether it would need to augment that funding with a rights offering or minority private-equity investment.
--
In the past few months, a number of private-equity firms and hedge funds have expressed interest in participating in the airline's refinancing. People familiar with the matter said private-equity firm Ripplewood Holdings LLC is among the firms studying the possibility, should the airline depart from its stated preference for sticking to a secured, all-debt package.
--
But the preliminary interest may hinge on investing opportunities that could pop up if either Delta Air Lines or Northwest Airlines files for Chapter 11, which both have warned they may do, said one person familiar with the matter. An investor group led by Ripplewood currently is in a battle with Whirlpool Corp. over which will get to acquire Maytag Corp.
--
After providing its business plan to UAL directors last week, the company gave the plan to all four institutions. A person familiar with the matter said the airline may win financing commitments by the end of this month. The four "all are actively in the running," this person said. The aircraft lease negotiations continue and UAL is exploring its options for raising junior capital should that be necessary, but it isn't actively pursuing that path at the moment, this person said.
--
But it is not certain the creditors committee will agree to support UAL's new timetable, especially if it doesn't feel the company has made enough progress on the aircraft-leasing negotiations or exit-financing by the Aug. 26 hearing.
Such tension is commonplace in bankruptcies. The unsecured creditors normally prefer that new money coming into the reorganized company be debt rather than equity, which lessens the amount left to pay their claims. In United's case, the creditors committee includes representatives of its largest unions, airplane manufacturer Airbus, bondholders, some suppliers and vendors, and the Pension Benefit Guaranty Corp., a federal pension insurer that is in the process of taking over all four of the airline's underfunded pension plans.
I'm sure many of you will now claim how all of this supports what you've been saying all along, blah blah blah
