United Airlines must continue cutting labor costs, bring other spending in line and complete a reorganization plan before it can take advantage of offers to provide financing that would allow the carrier to leave bankruptcy protection.þþThe carrier disclosed Monday that it has received four offers, ranging from $2 billion to $2.5 billion, from large lenders to provide exit financing. It received another boost Tuesday, when a bankruptcy judge approved a deal that dramatically reduces how much of O'Hare Airport's debt United must pay.þþThe deal, reached earlier with bondholders, slashed United's obligation to $150 million from $600 million. The debt is from bonds O'Hare sold to United to fund construction projects specifically for the airline, a spokesman said. A Chicago Aviation Department spokeswoman declined to comment.þþDetails of the financing offers disclosed Monday have not been released, but the Tribune confirmed that Citigroup, Deutsche Bank, J.P. Morgan and GE Commercial Finance have submitted proposals. All have experience in airline financing.þþÿWe need to continue the work we've already done, including our labor negotiations and resolving the pension issue,ÿ Jean Medina, a United spokeswoman, said Tuesday.þþThe airline has not revealed its exit plan, including details on how ownership of United would be distributed or how the board would be made up. Those questions would have to be answered before a lender would provide exit financing, said Douglas Baird, a bankruptcy expert at the University of Chicago, who has closely followed United's financial woes.þþÿThey have to have some vision, because if they really have a plan to leave bankruptcy, they have to have a vision of who's going to hold equity in the company,ÿ he said. ÿThey have to specify who's going to be on the board.ÿþþIt is also likely the lenders would demand some say in how the exit plan is structured, Baird said.þþþ
Source: Chicago Tribune
