Atlas Air sees prepackaged Chapter 11 filing in Dec.
Sat September 13, 2003 12:13 AM ET
NEW YORK, Sept 12 (Reuters) - Cash-strapped cargo airline Atlas Air Worldwide Holdings Inc. said on Friday it expects to file a prepackaged Chapter 11 bankruptcy by the end of this year in a bid to restructure its debt.
The company, based in Purchase, New York, which has been hurt by sluggish cargo shipments throughout a three-year U.S. economic slump, said it anticipates having agreements in place with its major creditors and lessors at the time of the filing.
It expects that to happen in the first half of December.
Atlas, which had warned of the possibility of a Chapter 11 filing, said it could not anticipate when it might emerge from bankruptcy.
In the same statement, Atlas said it was unlikely a previously announced restatement of its 2000 and 2001 finances would ever be completed because it was unable to locate certain financial records from the period. [the dog ate them <g>]
The company had delayed filing its financial statements for 2002 as well as the first two quarters of 2003 because of the anticipated restatement, but released those unaudited results on Friday.
For the year ended Dec. 31, 2002, Atlas reported a net loss of $36 million. Atlas also reported a net loss of $65.3 million for the first six months of 2003.
It had $142.7 million in cash and short-term investments as of June 30.
It expects an audit of its 2002 results to be completed by the end of September.
Separately on Friday, Atlas said its Atlas Air unit reached a critical agreement with debt holders.
It said in a statement that the holders of a majority of its Class A Enhanced Equipment Trust Certificates (EETCs) had entered into a term sheet agreement regarding a restructuring of the equipment notes and leases related to the airline's financing transactions.
The EETCs were issued in 1998, 1999 and 2000 to finance the carrier's initial fleet of 12 Boeing 747-400 freighter aircraft.
Atlas, which operates air cargo through its Atlas Air and Polar Air Cargo units, has been in talks with lessors for months to reduce or defer aircraft payments.
Both commercial airlines and cargo carriers are attempting to lower payment terms with lessors to better match the declining market value of aircraft.
The company made a partial payment to debt holders in July in exchange for more time to work on a restructuring.
As part of the deal, the holders also agreed to extend a forbearance agreement, which expired Friday, until December 15. The extension will allow Atlas to prepare final documentation relating to the agreement, it said.
The deal is subject to Atlas' compliance with covenants and conditions in the agreement and execution of final documentation, the company said in a statement.
Earlier this week the New York Stock Exchange suspended trading in Atlas' common stock.
http://reuters.com/financeNewsArticl...anyResultsNews
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Look for the "business as usual" news stories soon, they customarily accompany airline bankruptcy announcements, e.g. :
http://www.denverpost.com/Stories/0,...030286,00.html
http://denver.bizjournals.com/denver...9/smallb3.html
http://qsilver.queensu.ca/law/news/i...-aircanada.htm