PURCHASE, N.Y. (Dow Jones)--Atlas Air Worldwide Holdings Inc. said it is considering filing for Chapter 11 bankruptcy protection, and reported that its Atlas Air unit reached a forbearance agreement with some certificate holders.
ADVERTISEMENT
In a press release Thursday, the airline holding company said it is considering various actions as part of its restructuring program, which was unveiled in March. If it does file for bankruptcy, the Purchase, N.Y.-based concern plans to emerge from Chapter 11 protection "as quickly as possible with minimum disruption to its businesses."
Atlas Air has been holding ongoing talks with its lessors and creditors. In March, the company said it expanded its restructuring talks with lessors for six of its aircraft to include all other lessors, bank lenders and representatives of holders of its public debt issue.
At that time, the company said it would suspend payments related to its bank debt, senior notes and leased aircraft. The airline also planned to continue making payments to all trade vendors.
Atlas Air reached the forbearance agreement with the holders of a majority of its Class A Enhanced Equipment Trust Certificates, or EETCs, which were issued to finance Atlas Air's initial fleet of 12 Boeing 747-400 freighter aircraft.
Under the agreement, Atlas Air paid $25 million, which was about 50% of the amount originally due on Wednesday.
Holders of a majority of the Class A Certificates consequently agreed not to take any actions related to defaults under the EETC financing deals for up to 60 days. However, the forbearance period will be extended for an additional 30 days if the company reaches a restructuring agreement before the end of the initial forbearance time frame.
The forbearance period also can be terminated early if Atlas Air defaults on specific obligations under the forbearance agreement.
Atlas Air also reached an agreement with its main bank group, led by Deutsche Bank, to restructure its obligations.
Meanwhile, the company is continuing negotiations with its remaining secured creditors and lessors.
Atlas Air's stock fell 12.5%, or 18 cents, to $1.25, shortly after the New York Stock Exchange (News - Websites) resumed trading the company's shares. Composite volume reached 615,600 shares, above the company's average daily volume of 564,241 shares.
ADVERTISEMENT
In a press release Thursday, the airline holding company said it is considering various actions as part of its restructuring program, which was unveiled in March. If it does file for bankruptcy, the Purchase, N.Y.-based concern plans to emerge from Chapter 11 protection "as quickly as possible with minimum disruption to its businesses."
Atlas Air has been holding ongoing talks with its lessors and creditors. In March, the company said it expanded its restructuring talks with lessors for six of its aircraft to include all other lessors, bank lenders and representatives of holders of its public debt issue.
At that time, the company said it would suspend payments related to its bank debt, senior notes and leased aircraft. The airline also planned to continue making payments to all trade vendors.
Atlas Air reached the forbearance agreement with the holders of a majority of its Class A Enhanced Equipment Trust Certificates, or EETCs, which were issued to finance Atlas Air's initial fleet of 12 Boeing 747-400 freighter aircraft.
Under the agreement, Atlas Air paid $25 million, which was about 50% of the amount originally due on Wednesday.
Holders of a majority of the Class A Certificates consequently agreed not to take any actions related to defaults under the EETC financing deals for up to 60 days. However, the forbearance period will be extended for an additional 30 days if the company reaches a restructuring agreement before the end of the initial forbearance time frame.
The forbearance period also can be terminated early if Atlas Air defaults on specific obligations under the forbearance agreement.
Atlas Air also reached an agreement with its main bank group, led by Deutsche Bank, to restructure its obligations.
Meanwhile, the company is continuing negotiations with its remaining secured creditors and lessors.
Atlas Air's stock fell 12.5%, or 18 cents, to $1.25, shortly after the New York Stock Exchange (News - Websites) resumed trading the company's shares. Composite volume reached 615,600 shares, above the company's average daily volume of 564,241 shares.
