United Airlines Holdings will offer 39.25 million shares priced at USD26.50 per share in a secondary share offering aimed at raising over USD1 billion.

The United Airlines (UA, Chicago O'Hare) parent said on Tuesday, April 21, that underwriters Morgan Stanley and Barclays will retain an option to purchase an additional 3.925 million shares. The offering is expected to close on April 24, 2020.

United is in fundraising mode given the impact the COVID-19 crisis has had on demand and a correlating decline in revenue inflows.

Aside from the share issuance, the carrier holding also expects to receive approximately USD5.0 billion from the U.S. Treasury Department through the Payroll Support Program under the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"). Approximately USD3.5 billion will be in the form of a direct grant and approximately USD1.5 billion will come via a low interest 10-year senior unsecured promissory note. United expects to receive the first instalment of these funds on or about April 21, 2020.

Earlier this week, United inked sales/lease-back agreements with BOC Aviation covering six B787-9s and sixteen B737-9s. While the transaction's value was not disclosed, United said all 22 aircraft are subject to binding orders from Boeing and are scheduled to deliver in 2020.

The ch-aviation fleets module shows that United owns all twenty-eight B787-9 and fourteen B737 MAX 9s it operates. The airline has a further ten B787-9s and at least twenty-three B737 MAX 9s on firm order from Boeing. The number of B737 MAX 9s on order could change as the airline has 48 orders for the family for which the exact variant has not been disclosed.

BOC Aviation does not lease any aircraft to United at present.

Meanwhile, in a stock exchange filing on April 20, United Airlines Holdings said it had recorded a USD2.1 billion preliminary pre-tax loss for the first quarter. Total revenues stood at USD8 billion, a 17% decline year-on-year.

The loss includes just over USD1 billion in special charges, mainly reflecting a loan linked to an investment in Colombia’s Avianca Holdings as it plotted a broad tie-up in Latin America. avianca airlines (AV, Bogotá) and subsidiary TACA International Airlines (San Salvador International) have not operated passenger flights since March 24. United also had to write down the value of its investment in Azul Linhas Aéreas Brasileiras (AD, São Paulo Viracopos) and in addition sustained USD50 million in losses from its routes in China.

As of April 16, the company said it had USD6.3 billion of cash, cash equivalents, short-term investments, and undrawn amounts, including USD2 billion under its undrawn revolving credit facility. In March and early April, it borrowed a total of USD2.75 billion under new secured term loan facilities.

United also said this week that it reached a settlement in March with Boeing over damages sustained in 2019 from the grounding of the B737 MAX, but it did not reveal any financial details.