General Lee
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By Paritosh Bansal
NEW YORK, Jan 19 (Reuters) - Delta Air Lines revised some conditions in its reorganization plan on Friday, giving creditors a larger say in its future, and indicated it would soon present its analysis of a takeover bid by US Airways Group to its board.
Delta (DALRQ.PK: Quote, Profile , Research), which is the target of an unsolicited $10.2 billion takeover offer from US Airways (LCC.N: Quote, Profile , Research), has said that it wants to exit bankruptcy protection as an independent carrier, but it needs the support of its creditors to succeed.
In the revised plan of reorganization filed on Friday, the airline gave its official creditor committee more say in requirements for approval of the plan, changing some clauses that were earlier to be decided solely by the company to include the opinion of the creditors' committee.
"It looks like the creditors' committee is trying to have more input into it," said Joe Capobianco, a partner in the New York law firm, Reisman, Peirez and Reisman. "That's probably been negotiated by the creditors' committee to get more say into the situation."
Atlanta-based Delta rejected a Nov. 15 takeover offer from US Airways, but the rival pushed ahead with its bid and raised its offer by about 20 percent earlier this month. Delta, the No. 3 U.S. carrier, said its management and advisers were studying the increased bid, but it reiterated that it still intended to exit bankruptcy independently. Delta's management and advisers are currently evaluating the revised US Airways proposal, in anticipation of making a further presentation to Delta's board of directors in the near future," the airline said in a revised disclosure statement, filed in a New York bankruptcy court. Delta, which has been operating under bankruptcy protection since September 2005, also recommended that creditors vote for it to exit Chapter 11 independently. Under its own plan, the airline projected 62 percent to 78 percent recovery for certain unsecured holders of impaired claims, or debt that would not be repaid in full. For its Comair subsidiary, it projected 76 percent to 100 percent recoveries for such creditors. Delta assumes that unsecured creditors hold about $14.2 billion in claims, and about $800 million against Comair. Holders of at least two-thirds in dollar amount and more than one-half in number of impaired claims must approve the plan. The court also needs to approve any plan. The airline also said that it no longer plans to have an equity rights offering, which would have allowed creditors to buy additional shares in the reorganized company. The airline said it plans to list shares of the new company on the New York Stock Exchange or Nasdaq.
Do you think they would do that if they haven't talked to those creditors on the OFFICIAL committee and asked them what they want? This is Delta making sure the committee votes their way I think. And, I think that stated unsecured creditors would get between 62 and 78 percent (or cents on the dollar) for their claims. Unsecured creditors at United got 24 cents on the dollar.
Bye Bye--General Lee
NEW YORK, Jan 19 (Reuters) - Delta Air Lines revised some conditions in its reorganization plan on Friday, giving creditors a larger say in its future, and indicated it would soon present its analysis of a takeover bid by US Airways Group to its board.
Delta (DALRQ.PK: Quote, Profile , Research), which is the target of an unsolicited $10.2 billion takeover offer from US Airways (LCC.N: Quote, Profile , Research), has said that it wants to exit bankruptcy protection as an independent carrier, but it needs the support of its creditors to succeed.
In the revised plan of reorganization filed on Friday, the airline gave its official creditor committee more say in requirements for approval of the plan, changing some clauses that were earlier to be decided solely by the company to include the opinion of the creditors' committee.
"It looks like the creditors' committee is trying to have more input into it," said Joe Capobianco, a partner in the New York law firm, Reisman, Peirez and Reisman. "That's probably been negotiated by the creditors' committee to get more say into the situation."
Atlanta-based Delta rejected a Nov. 15 takeover offer from US Airways, but the rival pushed ahead with its bid and raised its offer by about 20 percent earlier this month. Delta, the No. 3 U.S. carrier, said its management and advisers were studying the increased bid, but it reiterated that it still intended to exit bankruptcy independently. Delta's management and advisers are currently evaluating the revised US Airways proposal, in anticipation of making a further presentation to Delta's board of directors in the near future," the airline said in a revised disclosure statement, filed in a New York bankruptcy court. Delta, which has been operating under bankruptcy protection since September 2005, also recommended that creditors vote for it to exit Chapter 11 independently. Under its own plan, the airline projected 62 percent to 78 percent recovery for certain unsecured holders of impaired claims, or debt that would not be repaid in full. For its Comair subsidiary, it projected 76 percent to 100 percent recoveries for such creditors. Delta assumes that unsecured creditors hold about $14.2 billion in claims, and about $800 million against Comair. Holders of at least two-thirds in dollar amount and more than one-half in number of impaired claims must approve the plan. The court also needs to approve any plan. The airline also said that it no longer plans to have an equity rights offering, which would have allowed creditors to buy additional shares in the reorganized company. The airline said it plans to list shares of the new company on the New York Stock Exchange or Nasdaq.
Do you think they would do that if they haven't talked to those creditors on the OFFICIAL committee and asked them what they want? This is Delta making sure the committee votes their way I think. And, I think that stated unsecured creditors would get between 62 and 78 percent (or cents on the dollar) for their claims. Unsecured creditors at United got 24 cents on the dollar.
Bye Bye--General Lee
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