Scotron11 From United Kingdom, joined Feb 2004, 1178 posts, RR: 3 Posted (10 years 3 months 2 weeks 5 days 14 hours ago) and read 1578 times:
FT reports that UAL has received four offers of up to $2.5Billion in debt-financing which would enable them to emerge from bankruptcy.
FT has identified them as Citigroup, JPMorgan, Deutsche Bank and GE, through its aircraft leasing subsidiary.(UAL refused to confirm these companies).
Jake Brace, UAL's finance director, said the funding is contingent on UAL terminating its defined benefit pension plans and reducing annual costs by a further $2.5Bn, including $725M in new labor cuts.
UAL has set a deadline of May to secure agreement on their pension plans. Brace said once these issues are resolved, the airline would present a plan of reorganization which takes approx 3-4 months, pointing to a 4th quarter exit, possibly.
Good news, I guess, although he qualified that there was no guarantee they will come out of Chap 11 definitely. Hope it comes to fruition.
StevenUhl777 From , joined Dec 1969, posts, RR:
Reply 1, posted (10 years 3 months 2 weeks 5 days 13 hours ago) and read 1544 times:
Interesting...for my Dad's sake, I hope they can stall the pension issue until after July 12th of this year, as there's a "look-back" period in effect based on the contract he retired under.
Still...it's a promising development. However, we're not quite at the $725mm in labor savings yet, and I'd be curious to see where the rest would come from. If I'm not mistaken, these banks also are the participating banks in the DIP financing package that UAL currently benefits from.
If all this comes to fruition somehow, expect that the new board of directors at UAL will include most, if not all, representatives of these banks. Reading between the lines, these big banks have enough confidence in UAL to allegedly make these committments, assuming cutbacks are made. To me, UAL needs to further cut back on domestic, and expand international, much more than the 12/14% split they have announced.
MoMan From United States of America, joined Aug 2004, 1054 posts, RR: 4
Reply 2, posted (10 years 3 months 2 weeks 5 days 13 hours ago) and read 1529 times:
This is an interesting development. I haven't heard too much in the media about dropping the pensions lately; I speculate they are laying low and hoping that the outcry will be over in a month or two and then mgmt will get approval and do it "under the radar". I read somewhere that the Pension benefit guaranty board (sp) was going to fight accepting any of United's pensions.
I wonder what will happen if they cannot get approval to drop their pensions.