C
chipmunn
Guest
The major differences between the TPG and RSA plans are:
RSA will replace TPG, CSFB, and BOA as the debtor-in-possession DIP financier for the originally negotiated $500 million in financing. The initial plan from the three investors provided $75 million on August 11 with $175 scheduled for release today with the requirement of restructuring agreements complete with ALPA, AFA, & the IAM, for a total of $250 million. Today the bankruptcy court approved the immediate release of $300 from RSA, which is $50 million more than would have been available from TPG, CSFB, & BOA. Final approval of the DIP financing and the release of the remaining $200 million credit facility is set for the next omnibus court hearing scheduled for November 7.
TPG will receive $2 million for expenses and has waived the $7 to $10 million break up fee. Also, Texas Pacific had the right to review any bids that were made and match them; RSA will not have that option.
The MPC credit card clearing-house cash hold back has been reduced from $140 to $60 million.
US Airways receives a 20 percent premium of $40 million over the TPG offer of $200 million in emergence financing. RSA will provide $240 million for a 37.5 percent versus TPG 38 percent of the company.
US has already received court permission to reject 67 aircraft leases that includes 57 parked aircraft and 10 Boeings recently removed from service. Previously US asked the judge to reject up to 150 additional Boeing leases despite strong objections from 18 lessors. Today at the hearing it was revealed that the Seabury Group had settled 16 of those objections with the parties and Judge Mitchell said he would rule on the other two as soon as possible. A 60-day bankruptcy code deadline that makes it easier for the company to dispose of aircraft leases expires October 9.
The most notable change is that RSA holds EETC’s on F-100s and 21 Boeing aircraft. RSA has agreed to restructure the Boeing lease agreements, which are part of the 150 jets US seeks to obtain relief on, to market rates. Reports indicate the company plans to operate the new fleet plan of 279 aircraft, but may reduce that number to 245 mainline jets if traffic does not come back to acceptable levels. RSA’s $340 million in US debt is backed by approximately 13 F-100s, and 21 Boeing aircraft that include B-737s and B-767s. Bronner said he expects US to retire the Fokker aircraft, which have already been rejected by the court and keep flying the Boeing planes. New market rate aircraft lease payments held by the pension fund will be determined in the bankruptcy process. Bronner said he is ready to accept the same lower rates that other lessors and lenders agree to.
The new agreement contemplates that the US unsecured creditors would obtain at least 8.5 percent of the new equity issued upon emergence; however, per the bankruptcy code with a new bid being approved RSA will have 60 days to perform “due diligenceâ€, during which time other bidders could submit a bid to the court, but competing bidders must match or exceed the RSA agreement.
RSA will have the same governance agreed to in the TPG MOU. Five of the 13 board seats would be held by the pension fund when the company emerges from bankruptcy. The remaining seats would be filled by the airline's CEO, two unsecured creditor representatives, one ALPA representative, one IAM representative, a representative designated by the other labor groups (AFA, CWA, & TWU) and two independent directors selected by Dave Siegel.
The court approved the terms for a bidding process in order to allow US to consider better equity investment offers that must be equal to or greater than the RSA agreement. Under the terms of the bidding process put in place today, qualified bidders will be able to conduct due diligence at a US data room and attend management presentations beginning tomorrow, September 27 and continuing through mid-November. This will allow US to finalize its equity sponsor and file its Chapter 11 reorganization plan by year-end per the so called Fourth District Court “Rocket Docketâ€.
According to Bloomberg News, “The good news is that the Texas Pacific people have terminated their interest as of now, Bronner said. That doesn't mean they won't reignite their interest. Indeed, Texas Pacific's statement left the door ajar. We will continue to watch the company's progress through Chapter 11 with interest, it said of US. But Siegel concurred that RSA's bid could be topped by another party, including Texas Pacific. I would not say they are out of the picture, Siegel said of Bonderman's interest.
After emerging from Chapter 11, US “will become a real jewel†because of reduced labor costs, rationalized fleet, and focus on regional routes, Bronner said before the fund reached the agreements with the airline. Bronner noted US is a better investment for the $24 billion Alabama Pension Fund than the stock or bond markets.
RSA will replace TPG, CSFB, and BOA as the debtor-in-possession DIP financier for the originally negotiated $500 million in financing. The initial plan from the three investors provided $75 million on August 11 with $175 scheduled for release today with the requirement of restructuring agreements complete with ALPA, AFA, & the IAM, for a total of $250 million. Today the bankruptcy court approved the immediate release of $300 from RSA, which is $50 million more than would have been available from TPG, CSFB, & BOA. Final approval of the DIP financing and the release of the remaining $200 million credit facility is set for the next omnibus court hearing scheduled for November 7.
TPG will receive $2 million for expenses and has waived the $7 to $10 million break up fee. Also, Texas Pacific had the right to review any bids that were made and match them; RSA will not have that option.
The MPC credit card clearing-house cash hold back has been reduced from $140 to $60 million.
US Airways receives a 20 percent premium of $40 million over the TPG offer of $200 million in emergence financing. RSA will provide $240 million for a 37.5 percent versus TPG 38 percent of the company.
US has already received court permission to reject 67 aircraft leases that includes 57 parked aircraft and 10 Boeings recently removed from service. Previously US asked the judge to reject up to 150 additional Boeing leases despite strong objections from 18 lessors. Today at the hearing it was revealed that the Seabury Group had settled 16 of those objections with the parties and Judge Mitchell said he would rule on the other two as soon as possible. A 60-day bankruptcy code deadline that makes it easier for the company to dispose of aircraft leases expires October 9.
The most notable change is that RSA holds EETC’s on F-100s and 21 Boeing aircraft. RSA has agreed to restructure the Boeing lease agreements, which are part of the 150 jets US seeks to obtain relief on, to market rates. Reports indicate the company plans to operate the new fleet plan of 279 aircraft, but may reduce that number to 245 mainline jets if traffic does not come back to acceptable levels. RSA’s $340 million in US debt is backed by approximately 13 F-100s, and 21 Boeing aircraft that include B-737s and B-767s. Bronner said he expects US to retire the Fokker aircraft, which have already been rejected by the court and keep flying the Boeing planes. New market rate aircraft lease payments held by the pension fund will be determined in the bankruptcy process. Bronner said he is ready to accept the same lower rates that other lessors and lenders agree to.
The new agreement contemplates that the US unsecured creditors would obtain at least 8.5 percent of the new equity issued upon emergence; however, per the bankruptcy code with a new bid being approved RSA will have 60 days to perform “due diligenceâ€, during which time other bidders could submit a bid to the court, but competing bidders must match or exceed the RSA agreement.
RSA will have the same governance agreed to in the TPG MOU. Five of the 13 board seats would be held by the pension fund when the company emerges from bankruptcy. The remaining seats would be filled by the airline's CEO, two unsecured creditor representatives, one ALPA representative, one IAM representative, a representative designated by the other labor groups (AFA, CWA, & TWU) and two independent directors selected by Dave Siegel.
The court approved the terms for a bidding process in order to allow US to consider better equity investment offers that must be equal to or greater than the RSA agreement. Under the terms of the bidding process put in place today, qualified bidders will be able to conduct due diligence at a US data room and attend management presentations beginning tomorrow, September 27 and continuing through mid-November. This will allow US to finalize its equity sponsor and file its Chapter 11 reorganization plan by year-end per the so called Fourth District Court “Rocket Docketâ€.
According to Bloomberg News, “The good news is that the Texas Pacific people have terminated their interest as of now, Bronner said. That doesn't mean they won't reignite their interest. Indeed, Texas Pacific's statement left the door ajar. We will continue to watch the company's progress through Chapter 11 with interest, it said of US. But Siegel concurred that RSA's bid could be topped by another party, including Texas Pacific. I would not say they are out of the picture, Siegel said of Bonderman's interest.
After emerging from Chapter 11, US “will become a real jewel†because of reduced labor costs, rationalized fleet, and focus on regional routes, Bronner said before the fund reached the agreements with the airline. Bronner noted US is a better investment for the $24 billion Alabama Pension Fund than the stock or bond markets.
