MIAMI – American Airlines Group (AA) has a proposed underwritten public offering of 38,500,000 shares of its common stock. The announcement comes as the company seeks to improve its financial position during the ongoing pandemic.
As a sole underwriter, Bank of America (BofA) priced the offering at US$13 per share. According to sources cited by Reuters, this represents a discount of 1.5% to the airline’s closing price this Monday. Before that day, the group’s stock had dropped at least 54% in the Dow Jones Transport Average index.
On its part, the company said that it had intentions to grant BofA a 30-day option to purchase. This will be up to 5,775,000 additional shares of its common stock in whole or in part. The airline group had already filed a registration statement with the SEC and a preliminary prospectus supplement related to the mentioned offering.
Cash Performance Throughout 2020
At the end of the first quarter, AA reported a net loss of US$2.2bn that left it with US$6.8bn in liquidity. At that time, it forecasted a second quarter with US$11bn of liquidity.
In the next quarter, the Summer season was expected to lift the balance sheet. By this time, the net loss was about US$2.1bn. In liquidity terms, AA ended Q2 with US$10.2bn in available cash.
Then, for Q3, the carrier said its liquidity balance would be in the order of US$16.2bn. However, the airline recorded a net loss of US$2.4bn in Q3 in comparison with its US$13.6bn of total available liquidity.
In today’s statement, the group said it expected to end the year with more than US$14.5bn in total available liquidity. Last month, it forecasted a cash burn between US$25m and US$30m per day Q4 2020.
American Airlines aircraft parked. Photo: The Associated Press.