American Airlines to transfer 33 aircraft to lender

New York, July 18 - AMR Corp. said it will transfer 33 Fokker 100 aircraft to a lender in the third quarter of this year in return for restructuring $130 million of debt.

The Fort Worth, Texas parent of American Airlines said in a filing with the Securities and Exchange Commission that the aircraft had "minimal" net book value as of June 30.

In return for taking back the airplanes, the lender will restructure $130 million of debt that relates to them, AMR said. AMR will also provide stock to the lender.

The agreement requires American to repay part of the original debt if, before Dec. 31, 2005, the company defaults, there is a loss of one of the aircraft, AMR rejects the lease under Chapter 11 or the company makes a Chapter 7 bankruptcy filing.

AMR added that it expects to recognize a "significant" gain because of the restructuring, mostly in the third quarter with some on Dec. 31, 2005, assuming none of the repayment provisions are triggered.

AMR also said that it anticipates issuing up to 3.0 million shares of common stock to vendors as part of efforts to restructure agreements with vendors, lessors, lenders and suppliers.

As of June 30, the company said it had issued 2.2 million shares in return for nearly $200 million of annual cost savings.

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