ATA gets expected written confirmation of plan of reorganization

By Caroline Salls

Pittsburgh, Jan. 31 - ATA Holdings Corp. obtained written confirmation Tuesday by the U.S. Bankruptcy Court for the Southern District of Indiana of the company's first amended plan of reorganization.

The court orally confirmed the plan Monday, and the company said it expects to emerge from bankruptcy in late February.

As part of the settlement of their claims, unsecured creditors will receive new common stock representing 7% of the outstanding equity in the newly formed privately held holding company new ATA Holdings Corp., which will become the ultimate parent company of ATA Airlines.

In addition, unsecured creditors will receive warrants to acquire 2% of the new stock.

Also, unsecured creditors will have the opportunity to purchase about $25 million of new stock for another 2%.

The plan includes an investment of $95 million from ATA's new investor, MatlinPatterson, consisting of $30 million in debtor-in-possession financing, which will be converted into equity upon emergence, and, upon emergence, $45 million to new ATA Holdings Corp. in the form of an equity investment, reflecting the full subscription of new stock in the rights offering.

MatlinPatterson will also provide an additional $20 million of exit debt financing.

ATA Holdings Corp., ATA Airlines' parent, filed for bankruptcy on Oct. 26, 2004. The Dulles, Va.-based company's Chapter 11 case number is 04-19866.

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