US Airways' merger agreement amended to increase commitment amount, available stock

By Caroline Salls

Pittsburgh, July 14 - US Airways Inc.'s merger and investment agreements were amended, changing the amount of financing commitments to up to $800 million from up to $500 million, according to a Thursday filing with the U.S. Bankruptcy Court for the Eastern District of Virginia.

In addition to changing the amount of the equity investment, the amendment, which applies to $150 million and $65 million equity investment agreements with Wellington Management Co., LLP and Tudor Investment Corp., also changes the number of new common stock shares available for equity participation to 59.64 million from 47.48 million.

Under the agreement, if US Airways enters into an alternative transaction, it will issue 11.2% of the new common stock at $15.00 per share to Par Investment Partners, LP and Peninsula Investment Partners, LP.

A total of 8.12 million of the new common shares will be issued to US Airways unsecured creditors under its plan of reorganization and 15.07 million shares will be issued to America West shareholders.

After the plan of reorganization takes effect, GE Capital Corp. will have the right to convert its notes into 5.22 million shares of new common stock, shares will be issued under the terms of any retention or severance plans, 4.28 million shares will be issuable under America West's stock option plans, warrants will be issued for 8.12 million shares, America West's 7.5% convertible senior notes due 2009 will be convertible into 3.86 million shares and holders of America West's 7.25% senior exchangeable notes due 2023 can put the notes at 95% of the stock's post-closing average trading price.

On July 1, US Airways announced that it had received no competing bids to the merger agreement with America West Holdings Corp. within the 30-day submission period.

US Airways' plan of reorganization was filed on June 23.

US Airways, an Arlington, Va.-based carrier, filed for bankruptcy on Sept. 12. Its Chapter 11 case number is 04-13819.

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