UAL Announces Stock, Note Sales; Shares Slide

   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; [e-mail]