Delta Bondholders Want Creditors, US Airways to Talk
By Eric Torbenson
Jan. 24 (Bloomberg) -- A group of Delta Air Lines Inc. bondholders urged the bankrupt carrier's unsecured creditors committee to begin talks with US Airways Group Inc.
US Airways' hostile $9.77 billion bid for Atlanta-based Delta would provide the best return for the creditors, Bill Derrough of Jefferies & Co., an adviser to the bondholders, said today after a meeting with the creditors panel in New York.
``We appreciated the opportunity to express our views to the committee and hope that they will take the appropriate action,'' Derrough said in an interview. The ad hoc bondholders group isn't officially recognized by the U.S. Bankruptcy Court.
The official creditors committee is reviewing Tempe, Arizona-based US Airways' bid to create the world's largest airline and Delta's plan to leave court protection as an independent carrier. Delta would be valued much as $12 billion, according to its plan.
Bondholders believe that the merger obstacles cited by Delta including antitrust approval could be overcome, according to Derrough, who represents 20 institutions that own $2.25 billion of the airline's debt.
A message to a representative of Delta's official creditors committee wasn't immediately returned.
US Airways and Delta both are courting the creditors because the panel will help set terms for any bankruptcy exit by Delta, the third-largest U.S. airline. The creditors hired Gordon Bethune, a former Continental Airlines Inc. chief executive officer, to study the carriers' competing plans.
Waiting
US Airways CEO Doug Parker said yesterday in an interview he was waiting to hear from the nine-member creditor committee. He reiterated that his takeover offer is off the table Feb. 1 unless the panel prods Delta into setting merger talks in motion.
Delta CEO Gerald Grinstein told a U.S. Senate committee today in Washington that he opposes a tie-up with US Airways, the seventh-largest U.S. airline, because it's the ``poster child of an anticompetitive merger.''
Delta's 8.3 percent note due in 2029 fell 2 cents to 64 cents on the dollar, according to Trace, the bond-price reporting service of the NASD.
Shares of Delta rose 12 cents to $1.18 in over-the-counter trading. US Airways' shares gained 8 cents to $53.35 in New York Stock Exchange composite trading.
The case is In re Delta Air Lines Inc., 05-17923, U.S. Bankruptcy Court,
Southern District of New York (White Plains).
To contact the reporter on this story: Eric Torbenson in Dallas at [email protected] .
By Eric Torbenson
Jan. 24 (Bloomberg) -- A group of Delta Air Lines Inc. bondholders urged the bankrupt carrier's unsecured creditors committee to begin talks with US Airways Group Inc.
US Airways' hostile $9.77 billion bid for Atlanta-based Delta would provide the best return for the creditors, Bill Derrough of Jefferies & Co., an adviser to the bondholders, said today after a meeting with the creditors panel in New York.
``We appreciated the opportunity to express our views to the committee and hope that they will take the appropriate action,'' Derrough said in an interview. The ad hoc bondholders group isn't officially recognized by the U.S. Bankruptcy Court.
The official creditors committee is reviewing Tempe, Arizona-based US Airways' bid to create the world's largest airline and Delta's plan to leave court protection as an independent carrier. Delta would be valued much as $12 billion, according to its plan.
Bondholders believe that the merger obstacles cited by Delta including antitrust approval could be overcome, according to Derrough, who represents 20 institutions that own $2.25 billion of the airline's debt.
A message to a representative of Delta's official creditors committee wasn't immediately returned.
US Airways and Delta both are courting the creditors because the panel will help set terms for any bankruptcy exit by Delta, the third-largest U.S. airline. The creditors hired Gordon Bethune, a former Continental Airlines Inc. chief executive officer, to study the carriers' competing plans.
Waiting
US Airways CEO Doug Parker said yesterday in an interview he was waiting to hear from the nine-member creditor committee. He reiterated that his takeover offer is off the table Feb. 1 unless the panel prods Delta into setting merger talks in motion.
Delta CEO Gerald Grinstein told a U.S. Senate committee today in Washington that he opposes a tie-up with US Airways, the seventh-largest U.S. airline, because it's the ``poster child of an anticompetitive merger.''
Delta's 8.3 percent note due in 2029 fell 2 cents to 64 cents on the dollar, according to Trace, the bond-price reporting service of the NASD.
Shares of Delta rose 12 cents to $1.18 in over-the-counter trading. US Airways' shares gained 8 cents to $53.35 in New York Stock Exchange composite trading.
The case is In re Delta Air Lines Inc., 05-17923, U.S. Bankruptcy Court,
Southern District of New York (White Plains).
To contact the reporter on this story: Eric Torbenson in Dallas at [email protected] .
