US Air Reaches Pact With GE Capital; Includes Financing
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Do_it_for_Dave
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- Nov 20, 2002
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Thursday January 2, 1:00 pm ET
Dow Jones Business News
U.S. Bankruptcy Judge Stephen S. Mitchell will consider approving the settlement, which requires US Airways to emerge from Chapter 11 by July 1, at a hearing scheduled for Jan. 16. US Airways says its post-petition lenders have consented to the request and agreed it's permitted under the parties' current $ 500 million post-petition loan.
The $120 million DIP loan would be made available in a series of monthly drawdowns beginning Jan. 27 and ending when the airline substantially completes a reorganization plan. Interest would accrue at the rate of the three-month London interbank offered rate plus 4.25%. The loan would be secured by collateral securing the parties' $404 million credit agreement from 2001.
The DIP loan would be refinanced with proceeds from a $360 million exit loan, which GE Capital would provide from the time when the airline substantially completes its plan through Dec. 31, 2008. Interest would accrue at the rate of three-month Libor plus 4.25% and be payable-in-kind until June 30, 2005, and quarterly thereafter. The loan will mature in December 2012, and principal would amortize in 36 monthly installments beginning in 2010.
GE Capital also has agreed to modify a past credit agreement, resolve aircraft or lease issues, and forgive or defer significant amounts owed to them by the debtors, US Airways said.
The maturity date of the parties' loan from November 2001 would be extended to 2012, from 2006. Also, the loan principal would begin amortizing in 2004, as opposed to 2002; the interest rate would remain at Libor plus 3.5%, rather than increasing to Libor plus 4.5%; and $37.9 million would be readvanced.
As reported, Judge Mitchell already has approved the readvancement of about half of the $37.9 million and will consider approving the readvancement of the other half at the Jan. 16 hearing.
The settlement also deals with the treatment of US Airways aircraft that GE Capital owns. Leases for four 737s will be amended to provide for monthly rentals at a new lease rate and modified to last through 2007. Leases for 36 Boeing Co. (NYSE:BA - News) aircraft will remain intact, and US Airways will cure all defaults. Leases for Airbus aircraft also will remain intact.
US Airways also would assume three engine maintenance agreements between the parties, re-lease nine aircraft that are subject to financing arrangements guaranteed by General Electric and continue to lease two other aircraft under modified terms.
US Airways filed for Chapter 11 protection in August, saying it would base its reorganization on cost cuts, exit financing supported by a federal loan guaranty and the liquidity provided by an equity investment.
The company filed a proposed reorganization plan with the court late last month that provides for the Retirement System of Alabama - one of its top creditors - to inject $240 million into the reorganized company in exchange for a substantial equity stake.
-By Deborah Eckert, Dow Jones Newswires;
Dow Jones Business News
U.S. Bankruptcy Judge Stephen S. Mitchell will consider approving the settlement, which requires US Airways to emerge from Chapter 11 by July 1, at a hearing scheduled for Jan. 16. US Airways says its post-petition lenders have consented to the request and agreed it's permitted under the parties' current $ 500 million post-petition loan.
The $120 million DIP loan would be made available in a series of monthly drawdowns beginning Jan. 27 and ending when the airline substantially completes a reorganization plan. Interest would accrue at the rate of the three-month London interbank offered rate plus 4.25%. The loan would be secured by collateral securing the parties' $404 million credit agreement from 2001.
The DIP loan would be refinanced with proceeds from a $360 million exit loan, which GE Capital would provide from the time when the airline substantially completes its plan through Dec. 31, 2008. Interest would accrue at the rate of three-month Libor plus 4.25% and be payable-in-kind until June 30, 2005, and quarterly thereafter. The loan will mature in December 2012, and principal would amortize in 36 monthly installments beginning in 2010.
GE Capital also has agreed to modify a past credit agreement, resolve aircraft or lease issues, and forgive or defer significant amounts owed to them by the debtors, US Airways said.
The maturity date of the parties' loan from November 2001 would be extended to 2012, from 2006. Also, the loan principal would begin amortizing in 2004, as opposed to 2002; the interest rate would remain at Libor plus 3.5%, rather than increasing to Libor plus 4.5%; and $37.9 million would be readvanced.
As reported, Judge Mitchell already has approved the readvancement of about half of the $37.9 million and will consider approving the readvancement of the other half at the Jan. 16 hearing.
The settlement also deals with the treatment of US Airways aircraft that GE Capital owns. Leases for four 737s will be amended to provide for monthly rentals at a new lease rate and modified to last through 2007. Leases for 36 Boeing Co. (NYSE:BA - News) aircraft will remain intact, and US Airways will cure all defaults. Leases for Airbus aircraft also will remain intact.
US Airways also would assume three engine maintenance agreements between the parties, re-lease nine aircraft that are subject to financing arrangements guaranteed by General Electric and continue to lease two other aircraft under modified terms.
US Airways filed for Chapter 11 protection in August, saying it would base its reorganization on cost cuts, exit financing supported by a federal loan guaranty and the liquidity provided by an equity investment.
The company filed a proposed reorganization plan with the court late last month that provides for the Retirement System of Alabama - one of its top creditors - to inject $240 million into the reorganized company in exchange for a substantial equity stake.
-By Deborah Eckert, Dow Jones Newswires;
Do_it_for_Dave
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- Nov 20, 2002
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The court requires the company to emerge from Chapter 11 by July 1st, doesn't mean that the company still doesn't NOT to emerge by March 31st.
cubfan02us
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- Sep 10, 2002
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From the GECAS website they state that they
hold 100 firm orders for Embraer and Bombardier
rj's.From the embraer site they state that GE has
50.
Will these 50 go to MDA,if so how fast?
Also did U originally do a sale-leaseback of
their airbus with GE,and are they planning on
receiving any more airbus in the immediate future?
The answer to these questions would go a long way
in firming up the picture for a lot of furloughed
U people...
hold 100 firm orders for Embraer and Bombardier
rj's.From the embraer site they state that GE has
50.
Will these 50 go to MDA,if so how fast?
Also did U originally do a sale-leaseback of
their airbus with GE,and are they planning on
receiving any more airbus in the immediate future?
The answer to these questions would go a long way
in firming up the picture for a lot of furloughed
U people...
This doesn't sound at all like a managment team that intends on liquidating, although they would like you to think the threat is real.
All they want to do is liquidate you (the employee) so they can replace you with contract maintenance and express agents. The rest of the employees who are left will be unnecessarily stuck with ridiculous wages and work rules - That is if you buy into managements threats.
Actions speak louder than words.
All they want to do is liquidate you (the employee) so they can replace you with contract maintenance and express agents. The rest of the employees who are left will be unnecessarily stuck with ridiculous wages and work rules - That is if you buy into managements threats.
Actions speak louder than words.
Dark Wrench
Member
- Aug 30, 2002
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