Delta Air Lines today provided
an update on the following financial transactions which are important
elements of its transformation plan.
Achievement of Cost Savings Under Aircraft Concession Program
Delta’s transformation plan includes cost savings under its aircraft
leases and aircraft financing transactions. On Nov. 24, 2004, Delta
entered into definitive agreements with aircraft lessors and lenders under
which the company expects to receive average annual concessions of
approximately $57 million between 2005 and 2009. In exchange for these
concessions, the company issued approximately 4,350,000 shares of its
common stock. These shares were issued without registration in reliance on
Section 4(2) of the Securities Act of 1933.
Completion of Transaction with Holders of 7.7% Notes Due 2005
Also on Nov. 24, 2004, Delta completed a transaction under which the
holders of approximately $97 million principal amount of the company’s
unsecured 7.7% Notes due 2005 exchanged those notes for (1) a like
principal amount of newly issued unsecured 8.0% Notes due 2007 and (2) a
total of 3,921,268 shares of company common stock. These securities were
issued without registration in reliance on Section 4(2) of the Securities
Act of 1933.
Delta expects that the holders of an additional approximately $38 million
principal amount of 7.7% Notes due 2005 will exchange those notes, in the
near term pursuant to existing agreements, for (1) a like principal amount
of newly issued 8.0% Notes due 2007 and (2) a total of 1,566,786 shares of
Completion of Exchange Offer for Short-Term Debt Securities
As previously announced, Delta today completed an exchange offer under
which holders of approximately $235 million aggregate principal amount of
enhanced pass through certificates due in 2005 and 2006 exchanged those
securities for a like principal amount of newly issued 9.5% Senior Secured
Notes due 2008 (New Notes). The exchange offer was made only to “qualified
institutional buyers” under Rule 144A, and the New Notes will not be
registered, under the Securities Act of 1933.
Update on Financing Commitments
Delta is continuing to work towards a closing and funding of its
previously announced financing commitments from GE Commercial Finance and
American Express Travel Related Services Company, Inc. These commitments
are subject to significant conditions.