USAir Group Inc said it seeking twobillion dlrs in bank debt to complete its takeover of Piedmont
Aviation Inc &lt;PIE> and its pending acquisition of PS Group
Inc's Pacific Southwest Airlines.
    In a filing with the Securities and Exchange Commission
that details its proposed 69 dlr a share cash tender offer for
Piedmont, USAir said Manufacturers Hanover Trust Co &lt;MHC>
"indicates its willingness" in a March 6 letter to provide up
to 500 mln dlrs of the financing.
    Manufacturers Hanover would also to act as agent for a bank
group to raise the rest of the financing, USAir said.
    USAir said a Manufacturers Hanover affiliate is currently
agent for its 400 mln dlrs revelving credit facility, which
would be replaced by the proposed two billion dlr financing.
    USAir put its total cost of completing the tender offer at
1.7 billion dlrs. Its Pacific Southwest takeover, which has
received federal approval and is due to come up for shareholder
approval later this month, is for 17 dlrs a share, or 400 mln
dlrs total.
    USAir said it has already bought 2.3 mln Piedmont common
shares, or 9.9 pct of the total outstanding from Norfolk
Southern Corp &lt;NSC> for 161.9 mln dlrs.
    The tender offer, which is being made through a USAir
subsidiary, USAG Acquisition Corp, would not be valid unless
USAir is left with more than half of Piedmont's total
outstanding common stock after the April 3 expiration.
    While negotiations on terms and interest rates of its bank
loans are not yet complete, USAir said it expects them to be in
the form of a one billion dlr two-year term loan and a one
billion dlr seven-year revolving credit facility.
    The company said it expects to repay the two-year loan
through equity, preferred and debt offerings and possibly
internal funds and the sale and/or leaseback of aircraft.
 Reuter
