United Airlines raises $1 billion worth of new shares amid virus outbreak

22.04.2020 - Petr Mazaylo
United Airlines raises $1 billion worth of new shares amid virus outbreak

After finalizing a deal with the U.S. government for a stimulus package, United Airlines Holdings Inc (UAL.O) will raise $1 billion by selling new shares to increase capital in order to survive a collapse in travel demand amid the virus outbreak.

This Chicago-based carrier was the first major airline to sell 39.25 Million shares to investors during this pandemic. Morgan Stanley and Barclays are underwriting Unitied’s shares priced at $26.50 each with a 4.9% discount on Tuesday’s close.

The airline company did the necessary measures to save its remaining capital until everything goes back to normal.                                                   

The $5 billion payroll aid requires United Airlines to issue warrants to the U.S. government, giving the Treasury the option to buy shares in the company at its April 9 closing price of $31.50.

The company announced on Tuesday that it had also granted Morgan Stanley and Barclays a 30-day option to buy up to 3.93 Million additional shares.

United Airlines said on Monday that it recorded a pre-tax loss of $2.1 billion in the first quarter of 2020.

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