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Published on Wednesday, April 22, 2020

United Airlines raising USD1 billion in share sale






Designed to weather a prolonged Covid-19 storm which it believes could last in 2021, United Airlines announced a secondary public offering to generate more than $1 billion.


It is offering 39.25 million shares.


At $26.50 per share, it is a discount of nearly 5% on United's share price at Tuesday's close.


The Covid-19 crisis has seen United's share price plunge by about two-thirds this year.


United is getting $5 billion from the government for payroll costs and plans to borrow an additional $4.5 billion in government loans.


Earlier this week preliminary first quarter results signaled a loss of more than $2 billion due to the Covid-19 travel downturn.


"Travel demand is essentially zero and shows no sign of improving in the near-term," United CEO Oscar Munoz and president, Scott Kirby candidly told employees last week.


United has also reached a settlement with Boeing over compensation for the continued grounding of Boeing Max 737 jets.

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