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United Airlines Holdings Inc on Tuesday announced a public offering to raise more than $1 billion, the first major airline to sell equity to help it survive a sharp travel downturn in the coronavirus pandemic.

The offer of 39.25 million shares, underwritten by Morgan Stanley and Barclays, was priced at $26.50 per share, United said in a statement, a discount of 4.9 percent on Tuesday’s close.

Shares in United, like other airlines, have been punished by decimated travel demand, losing 67 percent over the past three months as the pandemic forced lockdowns in many countries.

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In an effort to boost capital and save costs until people start flying again, U.S. airlines have grounded fleets, raised debt, cut executive salaries, asked employees to take unpaid leaves of absence and sought government aid.

United is set to receive $5 billion from the U.S. Treasury to cover payroll through Sept. 30 and has said it expects to borrow up to about $4.5 billion from a separate government package for airlines. In exchange for part of the funds, the airline must issue warrants for the Treasury to purchase shares at its April 9 closing price of $31.50.

The stock offering announced Tuesday includes a 30-day option for the underwriters, Morgan Stanley and Barclays, to purchase up to 3.93 million additional shares.

In a separate statement on Tuesday, United said it reached a settlement last month with Boeing Co over damages incurred in 2019, when airlines were forced to cancel flights due to the 737 MAX grounding that followed two fatal crashes. It did not disclose any financial details.

United on Monday said it expects to report a pre-tax loss of about $2.1 billion for the first quarter.

(Reporting by Tracy Rucinski, Bharath Manjesh; additional reporting by Kanishka Singh; Editing by Maju Samuel and Leslie Adler)

This article was written by Tracy Rucinski from Reuters and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

Photo Credit: United Airlines Boeing 777-200 N796UA at Chicago O'Hare Airport. Tim Christoph / Unsplash