$UAL is it all on the table now ? Shares of United Airlines Holdings Inc. UAL, +3.08% dropped 6.8% in premarket trading Monday, after the air carrier said a recorded a much wider-than-expected first-quarter loss, and announced plans to borrow up to $4.5 billion under the Coronavirus Air, Relief and Economic Security (CARES) Act. The company said on a preliminary basis, it recorded a net loss of $2.1 billion, and a loss of $1.0 billion on an adjusted basis, which excludes non-recurring charges and losses. The FactSet consensus for net losses was $622.7 million and for adjusted losses was $533.5 million. United said revenue fell 17% to $8.0 billion, below the FactSet consensus of $8.35 billion. United said it submitted an application to loan program under the CARES Act, which has a term of up to five years. If the company borrows up to $4.5 billion, it will be obligated to issue warrants for the government to buy 14.2 million shares, or about 5.7% of the shares outstanding, at a strike price of $31.50, which is 8.3% above Friday's closing price of $29.08. United also expects to receive $5.0 billion through the Payroll Support Program (PSP) under the CARES Act, which will require United to issue warrants to buy 4.6 million shares (1.9% of the shares outstanding). Separately, United said it entered into a sale-and-lease agreement with BOC Aviation for 16 Boeing 737 Max aircraft and 6 Boeing 787-9 aircraft, which are scheduled to be delivered this year. The stock has lost 67.6% over the past three months through Friday, while the Dow Jones Industrial Average DJIA, +2.99% has declined 17.4%.
Source marketwatch
