American Airlines Group is trying to replenish its liquidity reserves
The pandemic has caused catastrophic damage to carriers and the tourism business. A number of major airlines have declared bankruptcy, while others are trying their best to get out of this situation. Even the world’s leading giants in the segment have suffered. American Airlines Group for this purpose decided to bring to the market a part of its shares worth $2 billion. According to a statement from the largest U.S. airline corporation, this move will increase liquidity and increase the chances of minimizing damage.
American Airlines managed to raise $1 billion after placing 74.1 million shares. The value of the shares is $13.5 per unit. The company received another $1 billion thanks to convertible bonds maturing before 2025, with a coupon rate of 6.5%. Initially, the corporation was going to sell shares and bonds worth $750 million.
The amount of funds received, including all costs, will be approximately $1.94 billion. This money will be used to ensure internal corporate processes and increase liquidity reserves. For the organizers of the placement there is an opportunity within 30 days to buy an additional 11.1 million shares of the company for a total of 150 million dollars.
American Airlines dates back to 1930, but the modern corporation is the result of the merger of 80 companies. The main office is in the state of Texas. The airline corporation is the largest in the world in terms of passenger traffic, fleet size and destinations. AA has regional partners and an extensive network of routes, with an average of about 6200 flights daily. The company’s aircraft fly to more than 50 countries and 356 airports.
By joining forces with other carriers, American Airlines has established Oneworld, which is considered the second largest alliance in the world. Until 2020, the alliance had more than 140,000 employees and a market capitalization of $25 billion.
The corporation called American Airways started its activity, under which a number of carriers worked. In 1934, the company was bought out and the new owner renamed it American Airlines. Thanks to the new aircraft, in 1936 the corporation was the first among competitors, which managed to make profitable the transportation of passengers. At that time, most of the income received from mail delivery.
An important milestone in the development of American Airlines was the merger with US Airways. Despite obstacles by the Department of Justice and prosecutors from different states, legal proceedings, the deal was concluded in 2013 and completed by 2015.