UAL shares close sharply lower
SkyWest seeks to sew up new regional pact with United
By Mike Maynard, CBS MarketWatch.com
Last Update: 4:25 PM ET June 10, 2003
WASHINGTON (CBS.MW) -- Shares of UAL Corp. lost more than half their value Tuesday, with investors taking heed of a regulatory filing in which the outstanding stock of United Airlines' bankrupt parent was said to have "little or no value."
UAL (UALAQ: news, chart) also warned it's "highly likely" that these shares will be canceled under any plan of reorganization. UAL's assets "will be insufficient to permit any meaningful distribution" to stockholders, the company said in a Securities and Exchange Commission filing.
Trading in the over-the-counter market as a result of the company's Chapter 11 filing last December, UAL shares closed at 76 cents, down $1.09. At their low for the session, the shares touched 64 cents.
UAL submitted the SEC filing to coincide with management's presentation of an updated business plan to its board as well as the company's creditors' committee and potential sources of exit financing.
The company's next court date in federal bankruptcy court is scheduled for June 17.
UAL's selloff came in sharp contrast to activity seen in much of the airline sector. Tracking the industry sector as a whole, the Amex Airline Index (XX:$XAL: news, chart) was higher by 0.7 percent at 49.31.
In a deal involving United, SkyWest (SKYW: news, chart) said it anticipates signing an 11-year agreement to expand United's regional carrier service, building on a contract currently in place.
While terms aren't expected to change much, United said it believes the new deal will "provide a significant economic benefit."
St. George, Utah-based SkyWest would get paid on a fee-per-departure rate under the new deal. SkyWest's shares closed higher by 6.8 percent at $16.36.
Also benefiting were shares of Atlantic Coast Airlines (ACAI: news, chart), up 92 cents, or 9.6 percent to $10.47. Dulles, Va.-based Atlantic Coast serves both United and Delta Air Lines (DAL: news, chart) as a regional carrier. |
