US Airways RSA Investment Q&A

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chipmunn

Guest
US Airways RSA Investment Q&A
The following are answers to questions employees may have about the announcement regarding the Retirement Systems of Alabama''s investment in US Airways:
Why has US Airways reversed its position and now accepted the bid from the Retirement Systems of Alabama (RSA)? Just a few days ago, the Company filed a motion before the Bankruptcy Court opposing the offer?
So will there still be a competitive bidding process?
News reports indicate that RSA is a creditor of US Airways. Did they cut a deal as part of this agreement?
Can you tell us a little more about RSA?
So what happens to Texas Pacific Group? Why did they so quickly bow out?
Overall, is this a good thing for the Company? Does it help or hurt the airline''s plan to emerge from Chapter 11 protection by early next year?
Q: Why has US Airways reversed its position and now accepted the bid from the Retirement Systems of Alabama (RSA)? Just a few days ago, the Company filed a motion before the Bankruptcy Court opposing the offer?
A: We have not reversed our position. What we asked the Court to do was reject RSA''s request that we be REQUIRED to accept their offer. We have committed that any equity investment will be accepted only if the investor shares our commitment to a labor-friendly restructuring which means that simply making a higher bid does not make it a better bid.
The original RSA offer was unsolicited, and came at a time when we were still in a 45-day exclusive period with Texas Pacific Group, which precluded us from soliciting other offers. Our filing to the Court reflected the Company''s position that since we had not had time to evaluate the offer or meet with RSA management, we should not be required to accept the offer.
We have spent much of this week in discussions and negotiations with RSA, and we have concluded that they share our interest in a labor-friendly restructuring and support the efforts of current management. That assurance, coupled with the higher equity investment offer and RSA''s willingness to assume the existing $500 debtor-in-possession (DIP) financing led to our decision to designate RSA as the new equity sponsor of our restructuring.
Q: So will there still be a competitive bidding process?
A: Absolutely. That process will be established as part of a hearing scheduled before the U.S. Bankruptcy Court today (September 26). The primary change is that the Retirement Systems of Alabama will be the lead bid, against which others will be evaluated.
Q: News reports indicate that RSA is a creditor of US Airways. Did they cut a deal as part of this agreement?
A: RSA owns aircraft that US Airways currently leases, or has leased in the past and has since rejected. The RSA-owned aircraft in the existing fleet include some Boeing 767 and 737 aircraft, and we have reached agreement on new, more favorable lease rates that reflect the current market. We have not disclosed those terms, just as we have not disclosed the terms of other renegotiated aircraft lease agreements that have been reached with other lessors.
Q: Can you tell us a little more about RSA?
A: We think it best that RSA speak for itself, but in general terms, RSA manages $25 billion worth of pension funds for public employees of the state of Alabama. The agency is led by its CEO, Dr. David Bronner. RSA has had a long-standing relationship with US Airways, and has also held investments in other airlines, including United Airlines, Delta Air Lines, and American Airlines. For further information, we suggest you visit the RSA website at www.rsa.state.al.us.
Q: So what happens to Texas Pacific Group? Why did they so quickly bow out?
A: Texas Pacific Group played an instrumental role in helping us put together our original financing package when we filed for Chapter 11 protection in August. Their credibility and respect in the financial community was a tremendous boost of confidence to our restructuring efforts. While they were serious about their commitment to invest in the Company, Texas Pacific Group stepped aside at US Airways'' request after RSA made a better offer that TPG was not prepared to match.
Q: Overall, is this a good thing for the Company? Does it help or hurt the airline''s plan to emerge from Chapter 11 protection by early next year?
A: The RSA investment proposal is definitely a good thing. It represents a higher equity investment offer against which all other bids will be measured. Furthermore, the interest of two respected financial investors first Texas Pacific Group, and now RSA demonstrates the value of a restructured US Airways with a competitive cost structure and a sound business plan. And finally, RSA is committed to the current management''s business plan and labor-friendly approach. Overall, the Company remains on track to emerge from Chapter 11 protection early in 2003.
 

gilbertguy

Senior
Aug 29, 2002
368
0
Chip-Will(can) this pension fund be offered to employees in the future as an investment option to them? Is it open to non-AL employees?
 

usfliboi

Veteran
Aug 20, 2002
2,070
270
I wouldnt hatch those eggs yet.... the way things happen around this place id just sit back and speculate, there are no assurances of anything
 
OP
C

chipmunn

Guest
HI Gilbertguy:

Gilbertguy asked: Will(can) this pension fund be offered to employees in the future as an investment option to them? Is it open to non-AL employees?

Chip answers: That would be a decision for the fund manager to make.

Chip
 

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