United revises debt-repayment plan
UAL Corp., parent company of United Airlines, said Friday the U.S. bankruptcy court approved an amendment to its debtor-in-possession financing facility with its current lenders, including JPMorganChase, Citigroup, CIT and GE Capital.
Bankrupt UAL said key terms of the amendment include an extension of the maturity date from June 30 through Sept. 30, and a reduction in the interest rates United must pay under the loan. In addition, the amendment waives the January EBITDAR covenant and adjusts the minimum monthly EBITDAR targets for United going forward. The amendment also allows for a potential reduction in the minimum cash balance requirement from $750 million to $600 million if United meets a certain EBITDAR milestone, UAL said.
“While we still have a number of difficult issues to address, including reaching long-term labor agreements with two of our unions and pension resolution with three of our unions, this amendment will continue our access to the debtor-in-possession facility while we focus on those efforts and move forward with additional restructuring initiatives in the months ahead,” said Jake Brace, United’s executive vice president and chief financial officer.