Delta Plans to Stay in the Air Without US Airways Buyout

Associated Press
Wednesday, December 20, 2006

ATLANTA, Dec. 19 -- Delta Air Lines filed a reorganization plan Tuesday that calls for it to emerge from bankruptcy protection next spring as a stand-alone company worth as much as $12 billion, which would be more than the market value of the nation's two biggest carriers combined.

Delta said that under the plan, its unsecured creditors would recover 63 to 80 percent of their allowed claims.

Delta's existing stock would be wiped out under the plan and creditors generally would receive distributions of new Delta common stock to settle their claims.

Delta outlined a five-year business plan and said it would be worth $9.4 billion to $12 billion after it's reorganized.

The high end of the equity value Delta is projecting would be more than the $11.6 billion combined market value of American Airlines and United Airlines.

Delta also said that its board voted to reject US Airways' $8.3 billion hostile takeover bid. "US Airways is the worst of all potential merger partners," Delta chief executive Gerald Grinstein said.

US Airways said it remained committed to its merger proposal. It said its offer, including $1.65 billion in cost savings it anticipates, provides more value than Delta's plan. The offer included $4 billion in cash and 78.5 million shares of US Airways stock.

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