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Delta says it can be strong by spring
2006-12-19 23:57
ATLANTA -- Delta Air Lines filed a reorganization plan Tuesday that calls for it to emerge from bankruptcy next spring as a stand-alone company worth as much as $12 billion, or slightly more than the combined market value of the nation's two biggest carriers.
The Atlanta-based company also said that its board has formally rejected US Airways' $8.5-billion hostile takeover bid, and its executives joined rank-and-file employees on a full-scale public relations assault against the merger proposal.
"US Airways is the worst of all potential merger partners," Delta Chief Executive Gerald Grinstein said during a conference call with analysts.
Grinstein didn't completely dismiss the idea of a merger with a company other than US Airways, saying later Tuesday that Delta would review any other bids. But he said Delta would not put out a "for sale" sign.
Delta's chief financial officer, Ed Bastian, said in a conference call with reporters Tuesday that Delta has not received any other offers.
Delta outlined a five-year business plan. Its advisers estimated the reorganized company will have a consolidated equity value of $9.4 billion to $12 billion, and that Delta's unsecured creditors would recover roughly 63% to 80% of their allowed claims.
The high end of the equity value Delta is projecting would top the $11.9 billion in combined market value of AMR Corp.'s American Airlines and UAL Corp.'s United Airlines.
Delta's existing stock would be wiped out under the plan and creditors generally would receive new Delta common stock to settle their claims. Delta so far has not decided whether to give creditors any cash.
US Airways' offer included $4 billion in cash and 78.5 million shares of US Airways stock.
Tempe, Ariz.-based US Airways Group Inc. issued a statement saying it remains committed to its merger proposal and added the plan, including $1.65 billion in anticipated cost savings, provides more value than Delta's proposal.
"We remain a disciplined and determined bidder for Delta," US Airways Chief Executive Doug Parker said.
An official with knowledge of US Airways' plans who spoke on condition of anonymity because of the sensitivity of the talks said Monday that US Airways was willing to increase its offer if Delta could show it is worth more.
But Delta said Tuesday it believes flying solo is the best proposal for everyone involved.
Delta said it believes the US Airways deal is not likely to gain regulatory approval. It also cited as obstacles: overwhelming labor issues and "flawed economic assumptions."
Creditors must now vote on whether to approve Delta's reorganization plan or any competing plan that may be filed with the court. The plan also awaits court approval.
Ultimately, the unsecured creditors committee will play a key role in determining Delta's fate. The committee has not said whether it will support Delta's plan, US Airways' plan or any other offer to buy Delta that may come in.
A lawyer for the committee, Daniel Golden, did not immediately return a call Tuesday seeking comment.
Bastian, Delta's finance chief, also said that the government's pension insurer is expected to give the final go-ahead today to Delta terminating its pilots' pension plan.
The termination would be effective Sept. 2 and would mean the federal Pension Benefit Guaranty Corp. would take over the pilot pension plan and pay retired pilots a benefit up to a certain limit, most likely less than pilots would have received under their original plan.
Источник: http://www.freep.com
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Delta says it can be strong by spring
BY HARRY R. WEBER
ASSOCIATED PRESS
ATLANTA -- Delta Air Lines filed a reorganization plan Tuesday that calls for it to emerge from bankruptcy next spring as a stand-alone company worth as much as $12 billion, or slightly more than the combined market value of the nation's two biggest carriers.
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MARK PHELAN: Electric car killer?
BY MARK PHELAN
FREE PRESS COLUMNIST
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"Who Killed the Electric Car?" caused a furor when it was released this year. The movie hammers away at GM and its EV1 electric car. (Sony Classic Pictures)
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GM "spent a huge amount of money advertising that car in California. People wouldn't buy them."
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GM got a raw deal.
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