Atlas Air headed for bankruptcy

Atlas Air headed for bankruptcy    The parent company of Atlas Air and Polar Air Cargo said over the weekend it will file for Chapter 11 bankruptcy protection in December, a schedule that it hopes will allow it to renegotiate credit and payment terms with major creditors and aircraft lessors in advance to reduce the amount of time spent in bankruptcy.
   Atlas Air Worldwide Holdings said it reached an agreement with some holders of equipment bonds to defer collection measures on overdue payments until Dec. 15. The bondholders initially granted Atlas a 60-day extension July 3. The bonds were used to help pay for Atlas Air's initial fleet of 12 747-400 freighters in 1998-2000.
   Earlier this year the air freight charter company said it had stopped payments on its bank debt, senior notes and six jumbo jets to preserve cash flow as it tried to renegotiate the terms of its obligations.
   Atlas, which operates 40 B747 freighters, also reported unaudited financial results for 2002 and for the first and second quarters of 2003. The company had to restate earnings after it discovered potential errors in its financial statements. The Securities and Exchange Commission is investigating Atlas' accounting troubles.
      According to the new results for the year ended Dec. 31, 2002 the company reported a net loss of $36 million on revenue of $1.2 billion. For the first six months of 2003, the company said it lost $65.3 million on revenue of $679.4 million. Operating losses were $8.8 million and $26.7 million for the respective periods.
   As a result of the restatement, Atlas said its previously announced figure of $185.1 million for undistributed profits at the end of 2001 actually turned into a $178.7 million accumulated deficit.
   Atlas said new auditor Ernst & Young is expected to complete its long-delayed 2002 audit by the end of the month. But Ernst & Young is unable to restate earnings for 2000 and 2001 because it cannot locate certain financial records from those periods, meaning Atlas is in violation of securities laws.
   The inability to meet SEC reporting requirements and the $1 minimum share price led the New York Stock Exchange last week to suspend trading Atlas' stock on the big board as it determines whether to delist Atlas from the exchange.