US Airways Confirms Equity Sponsor

US Airways Group, Inc. announced today that it has officially designated The Retirement Systems of Alabama (RSA) as equity sponsor for the company’s plan of reorganization, following a bidding procedure previously approved by the U.S. Bankruptcy Court.

“Designation of RSA as equity sponsor reaffirms our commitment to a ‘fast-track’ emergence from bankruptcy and a successful restructuring of our business,” said David Siegel, president and chief executive officer of US Airways. “RSA has demonstrated a strong commitment to our vision for a reorganized and highly competitive airline, and our management team looks forward to working with them as we chart a path for success and profitability.”


The formal selection of RSA as the equity sponsor for US Airways’ reorganization has been endorsed by the Committee of Unsecured Creditors appointed by the Court to represent the interests of creditors during the reorganization. The RSA investment is subject to customary conditions to closing, as well as the company’s achievement of certain financial and operational benchmarks.


On Aug. 11, 2002, the company filed its voluntary petitions for Chapter 11 reorganization in the U.S. Bankruptcy Court for the Eastern District of Virginia in Alexandria. As previously announced in September, RSA agreed to invest $240 million for approximately 37.5 percent ownership interest in the restructured US Airways. This percentage of equity ownership is subject to change based upon definitive agreements in the final plan of reorganization. RSA has underwritten a $500 million debtor-in-possession (DIP) financing facility. So far, the airline has drawn $300 million on the $500 million DIP loan. The remaining $200 million can be accessed when US Airways meets certain remaining stipulations for a $900 million federal guarantee of a $1 billion loan, which has been given conditional approval by the Air Transportation Stabilization Board (ATSB). RSA also continues to hold approximately $340 million of debt obligations related to US Airways’ aircraft.


On Sept. 26, 2002, Judge Stephen S. Mitchell approved RSA`s proposed investment agreement and the terms for a competitive bidding process in order to allow the airline to consider higher or otherwise better equity investment offers. US Airways said today that no other competing bids were received by the deadline of Nov. 15, 2002, set by the court. The company expects to file its disclosure statement and plan of reorganization in mid-December 2002, and currently anticipates its emergence from Chapter 11 in the first quarter of 2003.

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