United Delays Debt Payments
Creating some elbow room as it attempts to avoid a bankruptcy filing, United Airlines yesterday "reached an agreement in principle" with German bank Kreditanstalt fur Wiederaufbau to restructure and push back $500 million in combined debt payments originally due Nov. 17 and Dec. 2. However, United still must deal with a remaining $375 million in debt obligations due to other parties on Dec. 2 and also owes mechanics $70 million in retroactive compensation. "We appreciate this significant show of confidence in United's future by KfW," said Glenn Tilton, United chairman, president and CEO. "This is a welcome development in our continuing efforts to achieve an out-of-court financial recovery."
Meanwhile, published reports from overseas during the past week quoted the chief executives of Lufthansa German Airlines and Singapore Airlines--both partners of United in the Star Alliance--as suggesting their airlines could aid United by possibly taking an equity stake or helping with debt payments. People familiar with United's situation confirmed such discussions are ongoing.