In news that was developing throughout the day on Wednesday and made public by Reuters Wednesday night, it appears that creditors are suggesting to AMR to seriously consider merger options.
The creditors, which includes Banks, Bondholders, the Pension Benefit Guaranty Corp (A quasi-US Government Agency charged with insuring private sector pension plans) and even LABOR UNIONS are asking AMR (American Airlines’ Parent) to seriously consider exploring merger options after reviewing the airline’s initial plans to function as an entity after clearing bankruptcy.
Obviously, creditors want every possible opportunity to recover their investments when a company files for bankruptcy protection, so this should come as no surprise. A merger would likely be the best case scenario for creditors because they would then receive in some form or fashion, equity or debt in the acquiring company versus settling for pennies on the dollar, or LOSING EVERYTHING, as a result of the bankruptcy process.
According to the Reuters article, no one is commenting on this recent development, but the idea of a merger is gaining popularity with Creditors, and I AM POSITIVE we will hear more about this in the coming days and weeks.
Ever since AMR filed for bankruptcy protection, Delta and US Air have both been mentioned as potential suitors. Both airlines have gone as far as retaining advisors to solicit their opinions on the merits of acquiring American Airlines.
I have covered this topic in previous posts, and if you’d like to catch up on it, you can read about it here: