NEW YORK -- A federal bankruptcy judge approved a Delta Air Lines plan yesterday to exit bankruptcy after the nation's third-largest airline spent nearly 20 months in a wrenching reorganization that cut 6,000 jobs and slashed $3 billion in costs.
Atlanta-based Delta Air Lines Inc. expects to emerge from court protection Monday.
It estimates it will be worth $9.4 billion to $12 billion, after Delta reduced labor costs,
restructured its fleet and terminated a pilots pension plan.
More than 95 percent of creditors voted to endorse the plan for Delta to leave bankruptcy as a stand-alone carrier.
That plan had been put in jeopardy by a $9.8 billion hostile takeover bid initiated in the fall by US Airways Group Inc. of Tempe, Ariz.
Delta successfully persuaded creditors to back its blueprint to emerge from bankruptcy and reject the buyout offer.
Now that it is leaving court protection, Delta may sell off its regional carrier subsidiary, Comair of Erlanger, Ky., which has received poor marks for lost baggage and flight delays.
Delta will celebrate its emergence Monday in Atlanta. Shares in the reorganized Delta, with the ticker symbol DAL, are scheduled to begin trading again Wednesday on the New York Stock Exchange.
"I feel elated," said Chief Executive Gerald Grinstein after the hearing.
"For the 47,000 (employees) ...
they're the ones who went through all the angst and made the sacrifices. It's for them I feel extreme relief."
Delta's reorganization plan will give unsecured creditors between 62 percent and 78 percent of the value of their allowed claims as shares of new Delta stock.
Delta's existing stock, which will be worthless, continued to trade until the court's approval of the plan. The shares fell 3.5 cents, or 21.
2 percent, yesterday to 13 cents.
Since January 2001, Delta has lost more than $18 billion. In recent months, though, its financial situation has improved, with the company projecting a 2007 pretax profit of $816 million, excluding special charges and reorganization costs.
Delta entered Chapter 11 on Sept. 14, 2005, amid high fuel prices and soaring expenses for labor and retirement benefits.
News RSS