United Airlines plans to sell shares & raise $1B amid demand collapse
Category: #world  By Saipriya Iyer  Date: 2020-04-22
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United Airlines plans to sell shares & raise $1B amid demand collapse

United Airlines Holdings Inc., a publicly traded airline holding company, is planning to sell its shares and raise over $1 billion. The company has taken up this initiative in an effort to increase its capital and survive the ongoing collapse in terms of air travel demand.

As per the reported statement made by the company, the offering consists of its 39.25 million shares. In addition to this, the underwriters are provided with an option to purchase 3.93 million additional shares. Sources with knowledge of the matter have stated that the deal is expected to be priced between $25.95 to $26.50 per share, before the stock market opens, with a discount of over 6.9% to the closing price of the shares.

The recent stock deal has become the first to be offered by a major airline in the United States amid the ongoing coronavirus pandemic. The offering highlights the efforts of various carrier airlines to raise an additional sum even after witnessing the government efforts to assist the current economic crisis by providing $50 billion in loans and grants. The air passenger traffic has reportedly fallen by nearly 95% in the United States due to the travel restrictions imposed by the government to curb the spread of the deadly COVID-19 disease.

Following the closure of regular trading conducted in New York, the airline holding company’s shares have declined 4% to $26.76, resulting in the drop of its market share to $6.89 billion. United Airlines also faced a considerable drop in stock by nearly 68% after Tuesday’s close, which is the sharpest decline recorded on the  Standard & Poor index of the 5 largest United States carriers. Barclays Plc and Morgan Stanley are the international bank companies that are underwriting the offering of United Airlines.

Source credit:

https://www.chicagobusiness.com/airlines-airports/united-plans-1-billion-share-sale-grab-more-cash



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Saipriya Iyer

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Saipriya Iyer

Saipriya Iyer develops content for Market Size Forecasters, Algosonline, and myriad other platforms. A computer engineer by profession, she ventured into the field of writing for the love of playing with words. Having had a previous experience of 3 years under her bel...

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