Delta CEO: US Air Buyout Is A Bad Deal
Delta Air Lines is forecasting a return to profitability next year, and again rejecting U.S. Airways' hostile overtures. The company's top executives have been hosting a webcast this morning--and CNBC’s Phi LeBeau has been monitoring details as they unfold.
LeBeau explained that what we’re starting to see today is the beginning of ‘trying to win over creditors’ – because that’s what’s needed for Delta to not be subject to a possible takeover from US Airways .
Delta executives are using strong language today; Delta CEO Gerald Grinstein said “Their proposal is a bad deal for Delta and its creditors.”
LeBeau explained the message from executives is clear - their proposal for reorganizing the company is the best move for creditors.
Here are the key points of the Delta reorganization plan:
-$9.4 – 12 Billion all equity payout / not cash
-63% - 80% of claim value
-And exit bankruptcy next year
A short while ago - US Air came out and said “We remain a dedicated bidder for Delta and believe our $8 billion is a superior offer.” – (because half of that is cash.)