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United wins cash props

New York, Nov. 22: Fearing the consequences if United Airlines files for bankruptcy, a coalition of a dozen leading global banks is crafting a refinancing plan for about $ 7 billion in leases on United’s fleet of planes, participants in the group said on Thursday.

The banks include European, Japanese and American lenders who hold leases on virtually every plane that United flies, these people said. The effort, which could result in a deal as early as next week, might provide United with yet another tool in its bid to persuade the federal Air Transportation Stabilisation Board to grant it $ 1.8 billion in loan guarantees.

United faces a critical December 2 deadline for repaying $ 375 million in loans backed by its aircraft. If it is unable to make or extend that payment, and has not received at least provisional approval from the board for the guarantees, the airline has said it will file for Chapter 11 bankruptcy protection.

The effort under way by United’s aircraft leaseholders has two main focuses, according to those taking part.

The first is to give the airline some financial breathing room by stretching out its aircraft leases, which can run up to 20 years or more. The second is to possibly come up with cash that United can use to run its day-to-day operations.

The informal effort, which has not been disclosed until now, involves a dozen major banks that are acting as agents for a wider syndicate of 50 banks and other lenders representing the holders of the individual leases on the planes, according to lenders taking part in the negotiations.

“We’re having good success in our conversations with lessors and lenders on refinancing our existing aircraft commitments,” Rich Nelson, a United spokesman, said on Thursday night. Nelson declined to provide further details or to identify the banks.

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