American Airlines parent, AMR, said on Wednesday a group of hedge funds was interested in providing equity financing to help it emerge from bankruptcy, with a report saying the funds could contribute up to USD$2 billion.
AMR asked the US Bankruptcy Court in New York for permission to pay the fees for a group of bondholders' attorneys and financial advisors as they considered whether to provide financing.
"The engagement of the Group presents a reasonable prospect of obtaining commitments that may facilitate the reorganization efforts," AMR said in a filing
The group includes an affiliate of JP Morgan Chase as well as Carlson Capital, Cyrus Capital Partners and Claren Road Asset Management, among others.
The group was considering USD$1 billion to USD$2 billion in equity financing and could provide enough to allow AMR to exit bankruptcy on its own, Dow Jones reported, citing three unnamed people involved with the matter.
That could give AMR more leverage as it explores a possible merger with US Airways, two of the people told Dow Jones.
The funds hold more than USD$600 million in AMR bonds, Dow Jones said.
A hearing to determine whether AMR should be allowed to pay the fees was set for September 20.
In a letter from the creditors to AMR that was included in the filing, the group said it was not committing to providing any financing.
"It is not at all unusual for large debt holders to express an interest in participating in the formulation of a plan of reorganization and to potentially provide equity or other financing as part of a plan," said an American Airlines spokesman.
"It also is not uncommon for the debtor to pay fees related to this effort."