Fund Puts $150M Toward US Airways Merger

The investment by Wellington Management Co. would increase to $500 million the amount of equity raised from five investors to help complete the merger and bring Arlington-based US Airways Group out of bankruptcy.


ALEXANDRIA, Va. (AP) -- An investment fund will contribute $150 million toward a proposed merger between US Airways and America West, US Airways said in court documents.

The investment by Wellington Management Co. would increase to $500 million the amount of equity raised from five investors to help complete the merger and bring Arlington-based US Airways Group out of bankruptcy.

Wellington's investment was disclosed in court documents filed Friday by US Airways.

US Airways and America West Holdings Corp. announced plans to merge May 19 with the goal of creating an airline to better compete with lower-cost rivals. The new airline would keep the US Airways name and create the sixth largest carrier in terms of passenger miles.

US Airways already had secured $125 million from Eastshore Holdings LLC, $100 million from Par Capital Management Inc., $75 million from Air Canada parent ACE Aviation Holdings Inc. and $50 million from Peninsula Investment Partners LP.

The terms of the Wellington deal were ''substantially similar'' to the investment agreements between US Airways and the other investors, the airline wrote in documents filed with the U.S. Bankruptcy Court in Arlington.

But the deal with Boston-based Wellington, an investment fund with about $470 billion in assets, differs in that Wellington will pay $16.50 for new common stock, compared with the $15 per share the others must pay. And unlike others investors, Wellington will not designate a director on the merged airline's board and will not be entitled to a breakup fee if it is displaced by another investor.

A judge is expected to establish a framework for approval of the proposed merger on Tuesday.

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