Chicago – United Airlines took on $3 billion in new debt today that keeps it on track to exit Chapter 11 bankruptcy in February after a more than three-year restructuring.
UAL Corp., United’s holding company, said the financing package is led by JPMorgan Chase & Co. and Citigroup Inc. and is to be repaid after six years.
The financing commitments, first disclosed in August, would enable UAL to pay off a $1.3 billion interim financing loan and provide post-bankruptcy operating cash.
The Elk Grove Village, Ill.-based company called the terms “very competitive.” “United’s restructuring positions the company to compete successfully with the strongest airlines and to confront ongoing industry volatility,” said Glenn Tilton, United’s chairman, CEO and president. “With the past three years as a proving ground and with these global institutions as our partners, we now look forward to moving beyond our restructuring and focusing all of United’s energy and resources on our customers, our investors and our employees.” General Electric Co. and Deutsche Bank AG also had made proposals but UAL selected JPMorgan and Citigroup to arrange the financing.
United said it will submit the commitment letter it signed today for approval of U.S. Bankruptcy Court. Details of the financing also will be filed with the court in the future.
The nation’s second-largest airline has been in Chapter 11 bankruptcy since December 2002.
