American Airlines wants another $3.5 billion to deal with financial problems created by the COVID-19 pandemic.
Fort Worth-based American Airlines said it will offer $750 million worth of shares to the public, along with $2.75 billion worth of private debt.
The airline said it will use part of the money it raises to renegotiate a $1 billion loan it took out in March as the pandemic began bludgeoning air carriers. That buys the carrier more time before its debt comes due next year with travel not expected to recover until at least summer 2021.
“The outbreak and global spread of COVID-19 has resulted in a severe decline in demand for air travel, which has adversely impacted our business, operating results, financial condition and liquidity,” according to a regulatory filing Monday about the new debt and offerings. “The duration and severity of the COVID-19 pandemic remain uncertain, and there can be no assurance that these actions will suffice to sustain our business and operations through this pandemic.”
The new shares will further dilute equity in American Airlines, which has already suffered since the COVID-19 pandemic began. After AAL stock increased to more than $30 a share in mid-February, it dropped as low as $9 a share last month.
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