US Airways Confirms The Retirement Systems of Alabama

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US Airways Confirms The Retirement Systems of Alabama as Equity Sponsor In Company''s Reorganization
ARLINGTON, Va., Nov. 18 /PRNewswire-FirstCall/ -- US Airways Group, Inc. announced today that it has officially designated The Retirement Systems of Alabama (RSA) as equity sponsor for the company''s plan of reorganization, following a bidding procedure previously approved by the U.S. Bankruptcy Court.
Designation of RSA as equity sponsor reaffirms our commitment to a ''fast- track'' emergence from bankruptcy and a successful restructuring of our business, said David Siegel, president and chief executive officer of US Airways. RSA has demonstrated a strong commitment to our vision for a reorganized and highly competitive airline, and our management team looks forward to working with them as we chart a path for success and profitability.
The formal selection of RSA as the equity sponsor for US Airways'' reorganization has been endorsed by the Committee of Unsecured Creditors appointed by the Court to represent the interests of creditors during the reorganization. The RSA investment is subject to customary conditions to closing, as well as the company''s achievement of certain financial and operational benchmarks.
On Aug. 11, 2002, the company filed its voluntary petitions for Chapter 11 reorganization in the U.S. Bankruptcy Court for the Eastern District of Virginia in Alexandria. As previously announced in September, RSA agreed to invest $240 million for approximately 37.5 percent ownership interest in the restructured US Airways. This percentage of equity ownership is subject to change based upon definitive agreements in the final plan of reorganization. RSA has underwritten a $500 million debtor-in-possession (DIP) financing facility. So far, the airline has drawn $300 million on the $500 million DIP loan. The remaining $200 million can be accessed when US Airways meets certain remaining stipulations for a $900 million federal guarantee of a $1 billion loan, which has been given conditional approval by the Air Transportation Stabilization Board (ATSB). RSA also continues to hold approximately $340 million of debt obligations related to US Airways'' aircraft.
On Sept. 26, 2002, Judge Stephen S. Mitchell approved RSA''s proposed investment agreement and the terms for a competitive bidding process in order to allow the airline to consider higher or otherwise better equity investment offers. US Airways said today that no other competing bids were received by the deadline of Nov. 15, 2002, set by the court. The company expects to file its disclosure statement and plan of reorganization in mid-December 2002, and currently anticipates its emergence from Chapter 11 in the first quarter of 2003.
This press release, as well as other statements made by US Airways may contain forward-looking statements within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, that reflect, when made, the company''s current views with respect to current events and financial performance. Such forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and factors relating to the company''s operations and business environment, which may cause the actual results of the company to be materially different from any future results, express or implied, by such forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, the following: the ability of the company to continue as a going concern; the ability of the company to operate pursuant to the terms of the Debtor-In-Possession financing facility; the company''s ability to obtain court approval with respect to motions in the Chapter 11 proceeding prosecuted by it from time to time; the ability of the company to develop, prosecute, confirm and consummate one or more plans of reorganization with respect to the Chapter 11 cases; risks associated with third parties seeking and obtaining court approval to terminate or shorten the exclusivity period for the company to propose and confirm one or more plans of reorganization, for the appointment of a Chapter 11 trustee or to convert the cases to Chapter 7 cases; the ability of the company to obtain and maintain normal terms with vendors and service providers; the company''s ability to maintain contracts that are critical to its operations; the potential adverse impact of the Chapter 11 cases on the company''s liquidity or results of operations; the ability of the company to fund and execute its business plan; the ability of the company to attract, motivate and/or retain key executives and associates; and the ability of the company to attract and retain customers. Other risk factors are listed from time-to-time in the company''s SEC reports. The company disclaims any intention or obligation to update or revise any forward- looking statements, whether as a result of new information, future events or otherwise.
Similarly, these and other factors, including the terms of any reorganization plan ultimately confirmed, can affect the value of the company''s various pre-petition liabilities, common stock and/or other equity securities. No assurance can be given as to what values, if any, will be ascribed in the bankruptcy proceedings to each of these constituencies. Accordingly, the company urges that the appropriate caution be exercised with respect to existing and future investments in any of these liabilities and/or securities.
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SOURCE US Airways
CO: US Airways; Retirement Systems of Alabama; RSA
ST: Virginia
SU: BCY RCN
http://www.prnewswire.com

11/18/2002 13:00 EST