US Airways files their reorganization plans

US Airways files their reorganization plans

US Airways Group has released their reorganization plans and submitted it to the Virginia bankruptcy court on Thursday. They also ensured the courts that they are on track with their plans to merge with America West Airlines by autumn. They have also mentioned the details of the plan including a a $150m rights offering for shares of the merged carrier.

The merged entity would fly under the US Airways flag and would be based at the America West headquarters in Tempe, Arizona. Private investors would be controlling the running of the company. The deal is worth more than $1.5 billion. This includes equity commitments and other financing from suppliers, vendors and other parties.

Creditors of the airlines company will receive either 10% of the money owed them or stock in the new airline formed at the end of the merger. US Airways was nation’s 11th biggest airlines before they had to file for this bankruptcy as a result of the slump seen in the market after the Twin Tower incident.

This new offer is better than the earlier one where unsecured creditors received 2 cents on the dollar for their claims. The plan is subject to approval by the bankruptcy court.