UAL Files Reorganization Plan

8th Sep 2005

UAL Corporation
, the holding company whose primary subsidiary is
United Airlines, today filed a Plan of Reorganization and Disclosure
Statement with the U.S. Bankruptcy Court for the Northern District of
Illinois.  The joint plan of reorganization includes UAL, United and 26 other
subsidiaries that filed for voluntary Chapter 11 reorganization on December 9,
2002.  United intends to exit from bankruptcy protection early next year as a
much more competitive company with a solid financial foundation and a
continued focus on delivering superior customer service.“United has made tremendous progress in our restructuring to improve
performance across the board, in costs, revenue, operations and service to our
customers.  Today, we are more flexible, more efficient and more resilient.
As a result, United is now positioned to compete with the best carriers and
confront the challenges of a volatile industry,” said Glenn Tilton, United’s
chairman, CEO and president.
  The Disclosure Statement includes a historical profile of the company, a
description of distributions to creditors and an analysis of the plan’s
feasibility, as well as many of the technical matters required for the exit
process, such as descriptions of who will be eligible to vote on the POR and
the voting process itself.
  Under the POR as proposed, unsecured creditors generally will receive
distributions of new UAL common stock to settle their claims.  Current holders
of UAL common stock, preferred stock and the 13.25% Trust Originated Preferred
Securities would receive no distribution, and those securities would be
canceled upon the effective date of the Plan.  United has made it clear for
some time that the company expected its common stock to be without value under
any plan of reorganization the company might propose.
  The filing contemplates a $2.5 billion, all-debt exit financing package.
As previously announced, United has received proposals with competitive terms
and conditions from four different institutions for exit financing.
  “The exit financing proposals we have received are a significant vote of
confidence in the progress we have made over the course of our restructuring,
our business plan and ultimately, United’s future—and in our ability to
manage through a complex industry environment, including unpredictable fuel
costs,” said Jake Brace, United executive vice president and chief financial
  “United is a vastly different company today than it was three years ago.
The company has made difficult, but necessary decisions and used the time well
to restructure the fundamental business,” said James J. O’Connor, United’s
lead director. “United now takes another significant step forward to formally
begin the process of exiting bankruptcy.”
  The filing indicates that the Company is exploring the possibility of a
rights offering in which it would offer unsecured creditors the opportunity to
purchase, on a pro rata basis, approximately $500 million in value of New UAL
Common Stock.  The proceeds of any such equity offering would be used to
provide the Company with additional capital for ongoing operational needs
and/or to reduce the amount of the exit financing facility and further
strengthening the Company’s capital structure.
  A hearing on the adequacy of the Disclosure Statement has been scheduled
to begin on October 11, 2005.  Court approval of the adequacy of the
Disclosure Statement will allow UAL to begin solicitation of votes for
confirmation of the Plan of Reorganization.
  The POR and Disclosure Statement filed today may be viewed at or .


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