767jetz
Veteran
- Aug 20, 2002
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Hmmmmm... 18 months, huh?
Where have I heard that before? How much you wanna bet it gets extended beyond that?
United agrees to pay extortionate interest rates on exit financing
- Thread starter FWAAA
- Start date
Where have I heard that before? How much you wanna bet it gets extended beyond that?
I was thinking the same thing...
Didn't I just read this week that DL just requested their period of exclusivity to be extended?
Must mean there is no plan and DL doesn't know what they are doing and will flounder along for years because of clueless management, just like you said about UA when they did it same thing, right WT?
Didn't I just read this week that DL just requested their period of exclusivity to be extended?
Must mean there is no plan and DL doesn't know what they are doing and will flounder along for years because of clueless management, just like you said about UA when they did it same thing, right WT?
AS if any banker / financier/ etc . . . would accept a business plan that didn't allow for variation in fuel!
"Your plan has fuel at $50, and if it goes to $51, then you'll have to liquidate. The odds of fuel price actually changing are really low, so here's your money!"
I bet that's a direct quote from one of the bankers. Ha! Wake up people.
(Sarcasm not directed at 767jetz)
They may very well make it out in 18 months, but will surely end up like Airways did........Back in front of the judge again.Hmmmmm... 18 months, huh?
Where have I heard that before? How much you wanna bet it gets extended beyond that?
WorldTraveler
Corn Field
- Dec 5, 2003
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the big difference between DL and UA and US is that Delta started its restructuring a year before it's bankruptcy filing. Remember they had already got a couple billion in costs out. The bankruptcy filing actually accelerated their restructuring.
The period of exclusivity in bankruptcy is just a couple months - not near long enough for any large company to file a POR - which is why extensions are routinely given. Now, if DL and NW file the half a dozen extensions that UA has, I'll agree with you. I still reiterate that DL has done more in its first 3 months in bankruptcy than UA did in two years. UA has finally come up with a plan but it took them two years to come up with it and another year to put it in place.
The period of exclusivity in bankruptcy is just a couple months - not near long enough for any large company to file a POR - which is why extensions are routinely given. Now, if DL and NW file the half a dozen extensions that UA has, I'll agree with you. I still reiterate that DL has done more in its first 3 months in bankruptcy than UA did in two years. UA has finally come up with a plan but it took them two years to come up with it and another year to put it in place.
They started a year before BK and still had a record breaking, totally incredible $$$$ loss 3rd quarter. Maybe they just aren't very good at planning.
BoeingBoy
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- Nov 9, 2003
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Determining whether a short or long stay in BK is better is way above my pay grade. All I know is that US supposedly cut annual expenses by over $2 Billion in BK1 (which lasted about 18 months) and was back in BK 18 months later seeking another $1 Billion plus in savings.
My intrepretation of that is that all the cost cuts in the world can't overcome p-poor management, but that's just my opinion.
Hopefully UA, DL, & NW will do better - especially their employees.
Jim
My intrepretation of that is that all the cost cuts in the world can't overcome p-poor management, but that's just my opinion.
Hopefully UA, DL, & NW will do better - especially their employees.
Jim
eolesen
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- Jul 23, 2003
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Perhaps, but NWA has done more in the first three months of its bankruptcy than DAL has, and they've got four times as many unions to contend with....
Cosmo
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- Aug 20, 2002
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And following up on my earlier post about United's anticipated huge NET profit in 2006 ...
According to Tuesday's (1/10/06) Chicago Tribune, in a recent SEC filing, United projected a 2005 net loss of a whopping $5.3 billion while expecting a net profit in 2006 of ...
... (I hope you're sitting down) ...
... an absolutely astounding $11.6 billion (and that's "billion" with a "B")!
Of course, as I and others have noted, this huge net profit is closely related to the many billions of dollars in non-cash reorganization charges that United has accumulated while in Chapter 11. But those charges averaged "only" about $1 billion per quarter, so it makes the 2006 figure (virtually all of which will be recorded in the first quarter) still an incredibly large amount.
That said, United's operating profit and cash flow will be the really important numbers to watch in 2006.
According to Tuesday's (1/10/06) Chicago Tribune, in a recent SEC filing, United projected a 2005 net loss of a whopping $5.3 billion while expecting a net profit in 2006 of ...
... (I hope you're sitting down) ...
... an absolutely astounding $11.6 billion (and that's "billion" with a "B")!
Of course, as I and others have noted, this huge net profit is closely related to the many billions of dollars in non-cash reorganization charges that United has accumulated while in Chapter 11. But those charges averaged "only" about $1 billion per quarter, so it makes the 2006 figure (virtually all of which will be recorded in the first quarter) still an incredibly large amount.
That said, United's operating profit and cash flow will be the really important numbers to watch in 2006.
As an interesting side note... ALPA announced the results of the claim sale offered to our pilot group where the pilots were given the opportunity sell their claim instead of receiving stock upon exiting BK. They estimated each pilot who sold his/her claim to receive a premium over and above the estimated 4-8 cents on the dollar each creditor(ie. Pilot) would normally get. They estimated that premium to be anywhere from an additional 1 cent to 7 cents on the dollar.
The claim in which 1,900 pilots (out of a total of about 6000) participated, sold for over 24 cents on the dollar!!! The total claim amount was roughly 720 million sold to other groups at auction who wanted to have the right to those shares.
The Smart Money is willing to pay 200% more (24+ cents vs 8 cents on the dollar) for the right to own UAL shares upon exit. If this is not a huge endorsement relating to the demand for a piece of United, I do not know what is.
It has been a long 3 plus years. I am cautiously optimistic about our future and wish all of my fellow employees brighter days ahead.
For the rest of you at other companies who have just started the process, hang in there. It is gonna suck big time, but this too shall pass. It will really, really suck, it will be unfair, it will be frustrating and depressing, but it will all work out. What doesn't kill you only makes you stronger. Seriously!
The claim in which 1,900 pilots (out of a total of about 6000) participated, sold for over 24 cents on the dollar!!! The total claim amount was roughly 720 million sold to other groups at auction who wanted to have the right to those shares.
The Smart Money is willing to pay 200% more (24+ cents vs 8 cents on the dollar) for the right to own UAL shares upon exit. If this is not a huge endorsement relating to the demand for a piece of United, I do not know what is.
It has been a long 3 plus years. I am cautiously optimistic about our future and wish all of my fellow employees brighter days ahead.
For the rest of you at other companies who have just started the process, hang in there. It is gonna suck big time, but this too shall pass. It will really, really suck, it will be unfair, it will be frustrating and depressing, but it will all work out. What doesn't kill you only makes you stronger. Seriously!
- Thread Starter
- #41
That number is guaranteed to generate large headlines among uninformed newspaper headline writers. B)
I agree with you - the numbers to watch are the operating profit and cash flow.
...but you leave out that while NWA's method has been to rape and pillage, DL has taken a much lesser offensive against its own rank and file. Sure, DL's employees have taken paycuts but with a much softer hand. What NWA has done is burnt every bridge and completely obliterated morale for an entire workforce. I'm not sure that their napalm tactics are a model any airline wants to follow.
Oil is at what, $65. If UA was basing everything off of $50, OUCH! I truly hope that UA makes it, but I think there has to be more planning done on the higher energy costs, which I think are here to stay. Otherwise it just may be another trip to the judge. just my thoughts..........
Gee thanks! United has spent the last 3 years listening, month after month, to all the know-nothing nay sayers and yet they keep attempting to predict the demise of United, with NO success, I may add.
Has it occurred to you that United is partially hedged (at $40 I have been informed) and that Tilton is an oil man himself....so he probably has a better grasp of the oil situation than most of us here.
Has it occurred to you that United is partially hedged (at $40 I have been informed) and that Tilton is an oil man himself....so he probably has a better grasp of the oil situation than most of us here.
Well the interest rate isnt as high as some want or think....
http://biz.yahoo.com/prnews/060124/cgtu022.html?.v=38
"Separately, United announced that it received offers of subscription for more than twice the capital necessary to support the $3 billion in exit financing that it sought, which consists of a $2.8 billion term loan and a $200 million revolving credit line. Because of this response, terms of the financing improved to reduce the financing cost of the facility by 75 basis points to 375 basis points over the London interbank offered rate (LIBOR).
"Response to syndication of our exit facility is yet another validation of the substantial and sustainable improvements made during our restructuring," said Jake Brace, executive vice president and chief financial officer.
James B. Lee, vice chairman of JPMorgan Chase, said, "As it completes the restructuring, United has proven itself to be attractive to a wide range of institutional lenders. This is the largest exit financing ever raised in the loan market and is well oversubscribed, a strong sign of lender confidence."
Combined with the pilots claim sale going way above anyones expectations, it seems that Wall Street has an interest in UAL as a going concern.
DC
http://biz.yahoo.com/prnews/060124/cgtu022.html?.v=38
"Separately, United announced that it received offers of subscription for more than twice the capital necessary to support the $3 billion in exit financing that it sought, which consists of a $2.8 billion term loan and a $200 million revolving credit line. Because of this response, terms of the financing improved to reduce the financing cost of the facility by 75 basis points to 375 basis points over the London interbank offered rate (LIBOR).
"Response to syndication of our exit facility is yet another validation of the substantial and sustainable improvements made during our restructuring," said Jake Brace, executive vice president and chief financial officer.
James B. Lee, vice chairman of JPMorgan Chase, said, "As it completes the restructuring, United has proven itself to be attractive to a wide range of institutional lenders. This is the largest exit financing ever raised in the loan market and is well oversubscribed, a strong sign of lender confidence."
Combined with the pilots claim sale going way above anyones expectations, it seems that Wall Street has an interest in UAL as a going concern.
DC
