United says 'highly likely' shares will be worthless CHICAGO (Reuters) =97 United Airlines parent UAL told holders of its common= =20 stock Tuesday that they can expect their investments to be wiped out once=20 the airline emerges from bankruptcy. UAL shares lost more than half of=20 their already depressed value on Tuesday morning after United said in a=20 regulatory filing it was "highly likely" the shares would be canceled under= =20 a bankruptcy reorganization plan. Assets of the world's second largest=20 carrier "will be insufficient to permit any meaningful distribution to its= =20 equity holders," based on many factors, including the competing claims of=20 various constituents, United said. Despite similar warnings from other big= =20 bankrupt corporations, shareholders still get caught off-guard. Retailer=20 Kmart Corp., for example, told investors repeatedly that their shares would= =20 likely be worthless when the company emerged from bankruptcy; yet hundreds= =20 of shareholders were angry and surprised to learn they had lost all their=20 money when Kmart exited Chapter 11 last month. After hiring a new CEO, UAL= =20 filed in December for Chapter 11 protection, the largest such case in=20 aviation history. It is working on a reorganization plan that would allow=20 it to emerge from bankruptcy in the fourth quarter of 2003 or the first=20 quarter of 2004. Canceling current equity and issuing new shares is common= =20 in bankruptcy cases when there are not enough assets to pay off current=20 holders of common stock. Common stockholders are at the bottom of the food= =20 chain after secured lenders, such as holders of debt securities backed by=20 aircraft. Those at the top include the providers of so-called=20 debtor-in-possession financing. A group of four institutions loaned UAL a=20 total of $1.5 billion to keep flying while its complicated bankruptcy case= =20 continues. SETTING THE AGENDA This week, UAL is beginning to present its updated business plan to its=20 board of directors, creditors' committee and potential sources of exit=20 financing from bankruptcy. Other than reducing costs, details of the=20 business plan are not yet known. A spokesman this week declined to comment= =20 on what the plan contains, or whether it involves the possible launch of a= =20 low-cost, no-frills airline within an airline. He also declined to say when= =20 the plan would be made public. Analysts and union sources have told Reuters= =20 a low-cost carrier has become less essential since United won huge hourly=20 pay cuts from its workers. As part of the bankruptcy process, United is=20 also sharply cutting its aircraft lease payments. UAL shares, traded on=20 pink sheets of the over-the-counter bulletin board after recent delisting=20 on the New York Stock Exchange, were down 59 percent, or $1.10, at 75 cents= =20 each in afternoon trade. In the late 1990s, UAL shares traded at more than= =20 $100. *************************************************** The owner of Roger's Trinbago Site/TnTisland.com Roj (Roger James) escape email mailto:ejames@xxxxxxxxx Trinbago site: www.tntisland.com Carib Brass Ctn site www.tntisland.com/caribbeanbrassconnection/ Steel Expressions www.mts.net/~ejames/se/ Mas Site: www.tntisland.com/tntrecords/mas2003/ Site of the Week: http://www.natalielaughlin.com/ TnT Webdirectory: http://search.co.tt *********************************************************