Bankruptcy judge OKs AMR bankruptcy financing
Federal bankruptcy judge lets American Airlines parent seek up to $3.25 billion in financing
NEW YORK (AP) -- A bankruptcy judge has given American Airlines permission to seek up to $3.25 billion in financing to emerge from Chapter 11 protection.
American parent AMR Corp., which is trying to merge with US Airways, would secure the borrowing with takeoff and landing rights and routes between the U.S. and Latin America.
Federal Judge Sean Lane approved the request after a hearing Thursday in New York. AMR will be able to seek up to $1 billion in revolving financing and up to $2.25 billion in a term loan.
AMR said in a court filing last month that it had commitments for $900 million in revolving financing from several large banks including Citigroup, Goldman Sachs, JPMorgan Chase and Morgan Stanley.
Lawyers for AMR said that the company wanted to take advantage of low interest rates to refinance some pre-bankruptcy borrowing and have ample cash when it emerges from Chapter 11 protection.
AMR filed for bankruptcy in late 2011 and announced in February that it planned to merge with US Airways Group Inc. and create the world's largest airline, with about 100,000 employees. The companies expect to complete the deal before the end of September.
Approval for that merger is pending before federal antitrust regulators, and it would need confirmation by US Airways shareholders. Judge Lane gave his approval in March.
