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Delta Air Lines Receives Final Court Approval for $2.2 Billion in Post-Petition Financing
Thursday October 6, 5:21 pm ET
Debtor-In-Possession Credit Facility Increased By $200 Million
ATLANTA, Oct. 6, 2005 (PRIMEZONE) -- Delta Air Lines (NYSEAL - News) today announced that the U.S. Bankruptcy Court for the Southern District of New York has granted final approval for the $2.2 billion in post-petition financing the company has arranged to help support its business during its Chapter 11 reorganization.
On Thursday, Judge Prudence C. Beatty granted final authority for Delta to utilize $1.9 billion in debtor-in-possession (DIP) financing provided to Delta by GE Commercial Finance and Morgan Stanley as co-lead arrangers. Pursuant to the court's interim approval in the first day orders on Sept. 16, 2005, Delta had already borrowed $1.4 billion under this facility. The total size of this credit facility was increased to $1.9 billion from $1.7 billion, and the interest rate on two of the term loans under this facility was reduced due to strong demand from participants in the loan syndicate.
The Court has also given final approval for Delta's secured post-petition financing provided by American Express. Delta borrowed the full $350 million of this facility pursuant to the Court's interim approval on Sept. 16, 2005. In connection with the borrowing of the balance of the $1.9 billion DIP facility, Delta will apply $50 million of the proceeds to pay down an equal amount of the American Express facility. As a result, Delta will have $2.2 billion of post-petition financing, an increase of approximately $1.22 billion from the pre-petition secured credit facilities.
``We are very pleased with the successful outcome of our efforts to obtain this level of post-petition financing,'' said Edward Bastian, Delta's chief financial officer. ``Because of strong demand from financial institutions that wanted to participate in the DIP loan being arranged by GE Commercial Finance and Morgan Stanley, we were able to increase the size of that loan by $200 million and also reduce the interest rate we will pay on a substantial portion of this loan. We believe that our ability to achieve these significant improvements to the DIP credit facility and to secure the continued participation of American Express in the loan package indicates the confidence that investors have in our business plan and our ability to execute that plan. The financial demands on our company continue to be unrelenting -- including unprecedented and unpredictable fuel prices. We believe our new financing arrangements will be sufficient to support our business during the reorganization, but it will require a continued commitment across our organization to reducing costs and growing revenues.''
At the hearing Thursday, Delta also received court authorization to assume the Delta Connection agreements between Delta and Atlantic Southeast Airlines (ASA) and SkyWest Airlines, which were entered into in September 2005 in connection with Delta's sale of ASA to SkyWest Inc. Upon entry of a final order approving the assumption of the Delta Connection agreements, Delta will be entitled to receive an additional $125 million from SkyWest, representing $95 million of the deferred purchase price and $30 million relating to certain aircraft financing deposits. Delta completed the sale of ASA to SkyWest on Sept. 7, 2005, at which time Delta received $350 million, consisting of $330 million of the purchase price and $20 million related to aircraft deposits. Under the Delta Connection agreements, ASA and SkyWest will continue to serve as Delta Connection regional carriers through 2020.
Delta and its subsidiaries filed to reorganize under Chapter 11 on Sept. 14, 2005, in the U.S. Bankruptcy Court for the Southern District of New York. The case number is 05-17923-PCB. More information about Delta's Chapter 11 reorganization is available on the Internet at delta.com/restructure. Information about the post-petition financing, as well as other court filings and legal information, is available online at deltadocket.com.
Delta Air Lines is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the
Thursday October 6, 5:21 pm ET
Debtor-In-Possession Credit Facility Increased By $200 Million
ATLANTA, Oct. 6, 2005 (PRIMEZONE) -- Delta Air Lines (NYSEAL - News) today announced that the U.S. Bankruptcy Court for the Southern District of New York has granted final approval for the $2.2 billion in post-petition financing the company has arranged to help support its business during its Chapter 11 reorganization.
On Thursday, Judge Prudence C. Beatty granted final authority for Delta to utilize $1.9 billion in debtor-in-possession (DIP) financing provided to Delta by GE Commercial Finance and Morgan Stanley as co-lead arrangers. Pursuant to the court's interim approval in the first day orders on Sept. 16, 2005, Delta had already borrowed $1.4 billion under this facility. The total size of this credit facility was increased to $1.9 billion from $1.7 billion, and the interest rate on two of the term loans under this facility was reduced due to strong demand from participants in the loan syndicate.
The Court has also given final approval for Delta's secured post-petition financing provided by American Express. Delta borrowed the full $350 million of this facility pursuant to the Court's interim approval on Sept. 16, 2005. In connection with the borrowing of the balance of the $1.9 billion DIP facility, Delta will apply $50 million of the proceeds to pay down an equal amount of the American Express facility. As a result, Delta will have $2.2 billion of post-petition financing, an increase of approximately $1.22 billion from the pre-petition secured credit facilities.
``We are very pleased with the successful outcome of our efforts to obtain this level of post-petition financing,'' said Edward Bastian, Delta's chief financial officer. ``Because of strong demand from financial institutions that wanted to participate in the DIP loan being arranged by GE Commercial Finance and Morgan Stanley, we were able to increase the size of that loan by $200 million and also reduce the interest rate we will pay on a substantial portion of this loan. We believe that our ability to achieve these significant improvements to the DIP credit facility and to secure the continued participation of American Express in the loan package indicates the confidence that investors have in our business plan and our ability to execute that plan. The financial demands on our company continue to be unrelenting -- including unprecedented and unpredictable fuel prices. We believe our new financing arrangements will be sufficient to support our business during the reorganization, but it will require a continued commitment across our organization to reducing costs and growing revenues.''
At the hearing Thursday, Delta also received court authorization to assume the Delta Connection agreements between Delta and Atlantic Southeast Airlines (ASA) and SkyWest Airlines, which were entered into in September 2005 in connection with Delta's sale of ASA to SkyWest Inc. Upon entry of a final order approving the assumption of the Delta Connection agreements, Delta will be entitled to receive an additional $125 million from SkyWest, representing $95 million of the deferred purchase price and $30 million relating to certain aircraft financing deposits. Delta completed the sale of ASA to SkyWest on Sept. 7, 2005, at which time Delta received $350 million, consisting of $330 million of the purchase price and $20 million related to aircraft deposits. Under the Delta Connection agreements, ASA and SkyWest will continue to serve as Delta Connection regional carriers through 2020.
Delta and its subsidiaries filed to reorganize under Chapter 11 on Sept. 14, 2005, in the U.S. Bankruptcy Court for the Southern District of New York. The case number is 05-17923-PCB. More information about Delta's Chapter 11 reorganization is available on the Internet at delta.com/restructure. Information about the post-petition financing, as well as other court filings and legal information, is available online at deltadocket.com.
Delta Air Lines is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the