United delays bankruptcy exit
United Airlines has pushed back its targeted exit from bankruptcy from this summer until fall, ensuring that its complex restructuring will now last close to three years — twice as long as anticipated.
The latest delay was formally acknowledged Friday when a U.S. bankruptcy court judge approved an agreement between United and its lenders that extends its temporary financing by three months until Sept. 30.
The new loan from J.P. Morgan Chase & Co., Citigroup Inc., CIT Group Inc. and GE Capital eases some terms for UAL Corp.’s United, including reducing interest rates, waiving the January monthly earnings benchmark that it missed and lowering its minimum cash requirement to $600 million from $750 million.
The improved terms represent a vote of confidence for United even though it continues to be unprofitable after 26 months in bankruptcy, reporting a widened fourth-quarter loss of $664 million and a $1.6 billion deficit for 2004.
“The changes to the financing agreement reflect our belief that United has made significant progress to date in lowering its costs and executing on its business plan,” said Bill Repko, managing director at J.P. Morgan Chase.
But United still is confronted with daunting challenges to emerge from Chapter 11, which it entered in December 2002 with expectations of an 18-month restructuring.
The Elk Grove Village, Ill.-based carrier has so far been unable to get two of its biggest unions to agree to long-term, lower-cost contracts.
Locke joins Safeco board of directors
Seattle Former Gov. Gary Locke is joining Safeco Corp.’s board of directors, the Seattle insurance company said Friday.
Locke will immediately join the board, and then stand for election at the company’s annual shareholders meeting in May, Safeco said in a statement.
Locke, 55, served two terms as Washington state governor before deciding against running for re-election last year. Earlier this week, Locke also said he was joining the Seattle law firm David Wright Tremaine LLP, where he will specialize in China and governmental relations.BC-Brascan-Weyerhaeuser,
Weyerhaeuser sells five properties
Vancouver, British Columbia Canada’s Brascan Corp. is paying about $970 million plus working capital to acquire five West Coast sawmills and two finishing plants from the U.S. forest products giant Weyerhaeuser Co.
The two companies announced the deal Friday, ending weeks of speculation about the future of sawmill and forestry operations Weyerhaeuser acquired in 1999 with the purchase of MacMillan Bloedel Ltd., formerly Canada’s largest lumber producer.
Toronto-based Brascan is buying five sawmills, two remanufacturing operations, timber cutting rights on government land and 635,000 acres of coastal timberland to add to the private assets in the company’s newly created timber fund, which manages assets for big institutional investors.
“Timber assets have been recognized by institutional investors as a very attractive asset class and we have received considerable interest from prospective partners to participate in this investment with us,” Brascan chief executive Bruce Flatt said in a statement.