As embattled Delta Air Lines prepares to lift off from bankruptcy later this month, the pilots union announced it had raised $1.16 billion by selling 92 percent of its $2.1 billion unsecured claim against the airline, reported Bloomberg.
This works out to 60 cents on the dollar. Bloomberg noted that claims against Delta were selling for more than 70 cents on the dollar while US Airways Group’s takeover bid was on the table.
The 6,200 pilots who chose the cash payment will receive an average of about $186,000, according to the wire service. The remaining pilots will receive new shares of Delta after its restructuring, reported The Atlanta Journal-Constitution. The newspaper also noted that nonpilot employees will receive stock, cash payouts, and other benefits worth an average of $13,000 per worker.
The decision by most pilots to take the lump sum may reflect their need for cash after the salary cuts of recent years, as well as their low confidence in the long-term prospects of Delta’s stock, the wire service suggested.
Union chairman Lee Moak said the pilots would receive their distribution shortly after Delta exits court protection, according to Bloomberg. A hearing on Delta’s reorganization plan is scheduled for April 25.