Shares of United Airlines (UAL) - Get Report were hit with more turbulence Wednesday after the beleaguered carrier disclosed it had raised $1 billion through a sale of its shares in a bid to keep cash rolling in amid the coronavirus crisis.
United Airlines' stock price fell 3.4% to $26.92 a share after the company notified the Securities and Exchange Commission of its sale of more than 39.2 million shares at $26.50 apiece.
The carrier has also given a green light to the underwriters of the stock sale, Barclays and Morgan Stanley, to buy an additional 3,925,000 shares within the next 30 days.
The stock sale comes atop the $5 billion in federal cash and loans the Chicago-based airline has tapped into as it scrambles to keep the lights on amid an implosion in air travel as the deadly virus keeps travelers at home.
United also told reporters on a conference call that it has the potential to raise an additional $20 billion in debt using assets as collateral, Bloomberg reported, noting the $1 billion stock sale was the first by a carrier during the Covid-19 pandemic.
Air travel in the United States has plunged by as much as 95% by some measures, with no clear timetable yet on when the industry might return to a level of activity resembling more normal levels.
The federal government is doling out as much as $50 billion in loans and grants to the battered airline industry under the $2 trillion coronavirus economic rescue bill passed in March.