American Airlines Announces Secondary Offering of 38.5 Million Shares

American Airlines will let Bank of America purchase up to an additional 5.8 million shares.
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Shares of American Airlines  (AAL) - Get Report were down slightly premarket Tuesday after the company announced a secondary public offering of 38.5 million shares. 

Bank of America, which is acting as the sole underwriter for the offering, will have a 30-day option to purchase up to 5.775 million additional shares as part of the offering. 

American Airlines shares were falling 1.3% to $13.03 per share Tuesday morning. 

Three weeks ago, American announced that it will be selling, from time to time, shares of its common stock with an aggregate gross sales price of up to $1 billion.

As of Nov. 9, the company had sold 57.86 billion shares of its common stock for a gross sales price of about $702 million. 

American Airlines recently reported a $2.4 billion third-quarter loss as the coronavirus pandemic has throttled the air travel industry. 

The company lost $4.71 per share in the quarter as revenues plunged 73% year-over-year to $3.2 billion. The group's cash burn rate, however, improved to around $44 million per day, from $58 million a day in the second quarter, allowing it to end the period with around $13.6 billion in total liquidity.

The largest U.S. carrier said its cash burn rate would decline again in the current quarter, to between $25 million and $30 million per day, and added it will raise around $1 billion in group equity in order to bolster its balance sheet.

“During the third quarter, we took action to reduce our costs, strengthen our financial position, and ensure our customers return to travel with confidence,” said CEO Doug Parker in a statement accompanying its third-quarter earnings.