Eastern Says It Has Bidders for $1.8 Billion of Its Assets
Eastern Airlines said Monday that it is moving close to the disposition of all of the $1.8 billion of assets that it said last week it plans to sell.
Eastern said in an announcement that about $1.1 billion worth of assets are already under firm sales contracts or are the subject of acceptable offers where a firm contract is expected to be announced shortly.
The strikebound airline, which filed for Chapter 11 bankruptcy March 9, also said an additional $300 million in assets “are subject to serious discussion where reasonable offers have been received.” It said acceptable deals could be announced “in weeks.”
The carrier said the remaining $400 million in asset sales are being discussed “with responsible and interested parties.”
The $1.1 billion, an Eastern spokesman said, included the Eastern Northeast shuttle, which it has agreed to sell to real estate billionaire Donald J. Trump for $364 million, and the sale to USAir of gates and routes at Philadelphia for $85 million.
Neither transaction has been closed. The airline also announced last week that it was leasing for five years a fleet of 14 Boeing 727 jets for $96.6 million to Pan American World Airways.
It would not divulge any other pending deals. It has said its valuable Latin American routes are available for sale.
The airline said it planned to announce other deals in the “coming weeks.”
Eastern, whose unions have been on strike since March 4, had said in its business plan that it planned to downsize the airline by two-thirds and would pay down $900 million in debt. It vowed that it would emerge from bankruptcy by Sept. 1.
Eastern said it had filed its report about the current situation concerning the sales with the federal bankruptcy court, which must approve all transactions.
Eastern said it had received a bid from Chicago hotelier Jay A. Pritzker, but it described the offer “at best a generalized expression of interest.”
Texas Air Corp., Eastern’s parent, has said the airline is not for sale. It vowed to continue to operate the smaller carrier.
A hearing is scheduled for Wednesday before federal bankruptcy Judge Burton R. Lifland to decide whether one creditor’s suit--which seeks to auction off the airline to individual bidders--has any validity.
Despite the lawsuit, Eastern has 120 days from the filing of its bankruptcy to come up with its own reorganization plan. Thus, it cannot be ordered by the court to sell the airline as a whole now if it does not want to do so.
The strike has virtually idled Eastern largely because almost all of the airline’s pilots and flight attendants refused to cross the picket lines of the striking machinists union.
