UAL Seeks Court Approval to Amend Loan
Monday June 27, 4:47 pm ET
Parent Company of United Airlines Seeks Court Approval to Raise Loan Commitment to $1.3 Billion
WASHINGTON (AP) -- UAL Corp., parent of United Airlines, Monday said it wants to increase its debtor-in-possession loan commitment by an additional $310 million to $1.3 billion.
The Tranche A loan would be sized at $200 million, and the Tranche B loan at $1.1 billion, the Elk Grove Village, Ill.-based company said.
Under the proposed amendments, UAL is required to maintain at least $750 million in cash or its equivalents.
According to the regulatory filing with the Securities and Exchange Commission, UAL also wants to extend the maturity date of the loan to Dec. 30, with the option of a further extension to March 31, 2006, if it meets certain conditions.
UAL filed for bankruptcy protection in December 2002, listing assets of $22.73 billion and debts of $21.48 billion.
The U.S. Bankruptcy Court in Chicago in December 2002 authorized UAL to strike a $1 billion financing agreement with a syndicate of banks.
By seeking an increase in the size of its bankruptcy loan, as well as an extension on the financing timeframe, UAL is more or less admitting that it is up a creek without a paddle. Combined with $60+/barrel oil prices, IMHO, the odds of United emerging from bankruptcy this year are between Slim and None, and Slim just left town on Ted...