| Add to balance / Manage account | User: | Log out |
| Prospect News home > News index > List of issuers U > Headlines for United Air Lines Inc. > News item |
UAL requests emergency approval of amendment to sale-leaseback financing agreement
By Caroline Salls
Pittsburgh, Oct. 31 - UAL Corp. requested emergency approval of an amendment to its letter agreement with GE Commercial Aviation Services LLC that was originally intended to fund the buyback of leased aircraft from the Public Debt Group, according to a Friday filing with the U.S. Bankruptcy Court for the Northern District of Illinois.
According to the motion, after the court approved the letter agreement, United Air Lines Inc. and GECAS were unable to consummate the sale lease-back transactions because GECAS could not obtain the required internal approvals.
However, GECAS has now obtained all required internal approvals to consummate the sale lease-back transactions under slightly less favorable terms, prompting the need to amend the agreement.
United said it continues to purchase 767 aircraft that it hopes, ultimately, will be financed under the amended agreement. However, until it can finance these aircraft, using its own funds to buy them places a significant drain on its liquidity.
"Indeed, from United's perspective, the inability of United to replenish its liquidity through the financing contemplated by this motion, while likely manageable, would leave United with an undesirably small cash cushion given the volatile state of the industry as a whole," the company said in the motion.
The financial terms of the agreement are being kept confidential. According to the motion, under the amended agreement, GECAS will pay 2% less for the purchase of the 767 Aircraft from United than it would have under the terms of the original agreement and the outside delivery date on the refinancings will be extended to Dec. 16.
A hearing is scheduled for Nov. 8.
UAL, the Chicago-based parent of United, filed for bankruptcy on Dec. 9, 2002. Its Chapter 11 case number is 02-48191.
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.