Manufacturing Industry
United Airlines strikes a deal that could wipe out USD450m of debt
Airline Industry Information, Oct 15, 2004
AIRLINE INDUSTRY INFORMATION-(C)1997-2004 M2 COMMUNICATIONS LTD
Bankrupt United Airlines has reached an agreement with its creditors which could write off USD450m of debt if approved by the US Bankruptcy Court.
The new deal concerns USD600m in municipal bond debt the airline incurred over improvements at Chicago's O'Hare Airport and means that if reorganised and approved the airline would only have to issue USD150m in new debt, removing 75% of the bond debt.
United Airlines struck the deal with the bondholders and the trustees of the debt but not with the City of Chicago which claims that if the bond debt is not settled it could take away the airline's gates and leased space at the airport. The city said that it has no plans to take such action but it wants a ruling that would give it sole power to do so. The settlement will come up for approval on 17 December 2004, reports the Chicago Sun-Times.
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