DOW JONES NEWSWIRES
UAL Corp. (UAUA) plans to sell at least 19 million shares and a
minimum $175 million of 10-year notes, becoming the latest carrier
to turn to the equity and bond markets to raise cash.
The stock sale would boost outstanding shares by at least
13%.
Shares dropped 8.4% to $8.45 in after-hours trading. The stock
was down 16% this year at the close but up 5% from a year ago.
US Airways Group Inc. (LCC), Delta Air Lines Inc. (DAL) and
American Airlines' parent, AMR Corp. (AMR), have been among the
carriers announcing sales of stock and/or notes. Industry observers
said carriers were looking for new sources of funds after
mortgaging everything from aircraft and spare parts to
frequent-flier miles, airport slots and gates to replenish balance
sheets still burdened with too much debt in an environment of weak
traffic and low fares.
UAL said proceeds will be used for general corporate
purposes.
In July, the United Airlines parent reported it swung to a
second-quarter profit on hedging gains, overshadowing a continuing
fall in demand and revenue. The airline also said at that time that
it would cut international capacity by another 7% for the last four
months of the year.
-By Kathy Shwiff, Dow Jones Newswires; 212-416-2357;
Kathy.Shwiff@dowjones.com