- Banned
- #1
NEW YORK, Dec 19 (Reuters) - Delta Air Lines Inc. (DALRQ.PK: Quote, Profile , Research) said on Tuesday its board rejected an $8.4 billion bid from US Airways Group Inc. (LCC.N: Quote, Profile , Research) and filed its own plan to emerge from bankruptcy as an independent airline.
Delta has repeatedly said that it intends to emerge from Chapter 11 protection as a stand-alone carrier, but this is the first time the Atlanta-based airline has rejected outright the US Airways bid, which was made last month.
Delta, the No. 3 U.S. carrier, said its five-year business plan filed with a U.S. bankruptcy court values the company at about $9.4 billion to $12 billion, and would result in a recovery for Delta's unsecured creditors of about 63 percent to 80 percent of their allowed claims.
Atlanta-based Delta said its board had concluded that its plan would provide the company's creditors with better value, greater certainty and a much faster timetable than the US Airways proposal.
"We will emerge as a thoroughly new Delta that will be a strong global carrier with a solid foundation for profitable growth in a highly competitive environment," Chief Executive Gerald Grinstein said in a statement.
The airline, which has been operating under bankruptcy protection since September 2005, said it intends to emerge from Chapter 11 in the spring of 2007.
The business plan projects a return to profitability in 2007 and an increase in net income, after profit sharing, from about $500 million in 2007 to some $1.2 billion in 2010.
The airline also expects to cut its net long-term debt by more than half to about $7.5 billion in 2007 from about $17 billion in 2005.
Delta has repeatedly said that it intends to emerge from Chapter 11 protection as a stand-alone carrier, but this is the first time the Atlanta-based airline has rejected outright the US Airways bid, which was made last month.
Delta, the No. 3 U.S. carrier, said its five-year business plan filed with a U.S. bankruptcy court values the company at about $9.4 billion to $12 billion, and would result in a recovery for Delta's unsecured creditors of about 63 percent to 80 percent of their allowed claims.
Atlanta-based Delta said its board had concluded that its plan would provide the company's creditors with better value, greater certainty and a much faster timetable than the US Airways proposal.
"We will emerge as a thoroughly new Delta that will be a strong global carrier with a solid foundation for profitable growth in a highly competitive environment," Chief Executive Gerald Grinstein said in a statement.
The airline, which has been operating under bankruptcy protection since September 2005, said it intends to emerge from Chapter 11 in the spring of 2007.
The business plan projects a return to profitability in 2007 and an increase in net income, after profit sharing, from about $500 million in 2007 to some $1.2 billion in 2010.
The airline also expects to cut its net long-term debt by more than half to about $7.5 billion in 2007 from about $17 billion in 2005.