Exclusive: AMR creditors to meet February 11, may vote on US Air merger

Thu Feb 7, 2013 7:24pm EST
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By Soyoung Kim and Karen Jacobs

NEW YORK/ATLANTA (Reuters) - AMR Corp AAMRQ.PK creditors plan to meet on Monday and could vote on a potential merger agreement between the bankrupt parent of American Airlines, and US Airways Group Inc LCC.N, several people familiar with the matter said.

The two airlines are working to finalize deal terms so the board of each company could also meet to vote on a merger on February 11, the same day AMR's unsecured creditors' committee is scheduled to convene, the people said.

If the parties meet this potential timetable - as currently envisioned but seen as aggressive - a merger agreement could come as soon as Tuesday, the people said, asking not to be identified because the matter is not public.

AMR filed for bankruptcy in November 2011 citing high labor costs. A combination with US Airways would create the world's largest airline by passenger traffic and help the two carriers better compete with rivals United Continental Holdings Inc UAL.N and Delta Air Lines Inc DAL.N.

Discussions are continuing and could still fall apart, they cautioned. While timing of a deal remains fluid, there is desire to get it done before February 15, when the confidentiality agreements AMR bondholders signed are set to expire, the people familiar with the matter said.

Under terms of the non-disclosure agreements, the group of influential AMR bondholders is not allowed to trade the airline's debt, people familiar with the matter have said.

Detailed financial information related to the merger talks is set to be publicly disclosed on February 15 so that the bondholders can resume trading without possessing confidential information. That is putting pressure on all the parties to reach a deal before then, the people have said.

US Airways, AMR and its creditors are hoping that the bondholders group will support the deal terms before the parties announce a merger agreement, the people said.   Continued...

A US airways plane takes off behind an American Airlines jet at Ronald Reagan National Airport in Washington April 23, 2012. REUTERS/Kevin Lamarque