USA320Pilot
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- May 18, 2003
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US Airways seeks to double share authorization
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Regards,
USA320Pilot
P.S. Why would US Airways want to double its shares and what could the additional shares be used for?
P.S. Why would US Airways want to double its shares and what could the additional shares be used for?
The airline said it does not have any immediate plans to issue the new shares but wants the authorization because recent share issuances as well as potential future issues would put it just 7 million shares short of its current maximum of 200 million shares.
P.S. Why would US Airways want to double its shares and what could the additional shares be used for?
Bonuses or other compensation would be my guess, including one Douglas Parker.
US Airways seeks to double issued shares
NEW YORK (MarketWatch) -- US Airways proposed to double the number of shares it's authorized to issue to ensure available capital for any unforeseen purposes. In a filing late Tuesday, the Tempe, Ariz.-based carrier said it would sell the new shares at its discretion to raise additional capital, pay dividends, make acquisitions, settle outstanding obligations, provide equity incentives to employees, and other general purposes. The proposal would raise the number shares US Airways can issue to 400,000 from 200,000. Shares of US Airways were down a fraction in premarket trading to $2.87.
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USA320Pilot comments: In my opinion, the two major reasons US Airways' Board wants to issue 200,000 more shares is to reaise additional capital in case the economy worsens or there is a shock event (such as uncontrollable energy costs) or to fund a strategic corporate transaction (SCT). If I had to guess US Airways may make its third attempt to acquire United, but that is strictly a guess based on history and recent public comments made by US Airways president Scott Kirby.
Separately, a merger with United would likely end US Airways' East vs. West pilot dispute because the NMB would order a representational election between USAPA and ALPA. In my opinion, the West pilots would work together with the United pilots to elect ALPA as the combined pilot groups collective bargaining agent, which would eliminate USAPA.
Regards,
USA320Pilot