ATLAS STOPS PAYMENTS ON LONG-TERM OBLIGATIONS
Atlas Air Worldwide Holdings Inc., owner of air cargo carriers Atlas Air Inc. and Polar Air Inc., said it is suspending payments related to its bank debt, senior notes and leased aircraft to preserve cash flow, but plans to continue payments to all suppliers and serve all of its customers.
It said talks are underway with bank lenders, holders of its public debt and lessors to restructure the terms of its obligations.
Earlier this year Atlas said it had stopped payments on six 747 jumbo jets as it tried to renegotiate lease terms.
Wall Street analysts have predicted that Atlas will become insolvent and forced to file for bankruptcy if it cannot restructure its debt. In a statement, the Purchase, N.Y.-based provider of heavyweight airlift suggested as much, saying: 'The company is optimistic that these restructuring discussions will be successful. However, there is no assurance that this will be the case. Should these negotiations prove unsuccessful, lessors and creditors may instead choose to accelerate the company's debt and leases and foreclose on their collateral,' most of which is aircraft.
Meanwhile, Atlas is expected to release restated earnings for 2000, 2001 and half of 2002 in the coming weeks.