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ITEM 1.01.
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ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
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On November 13, 2020, American Airlines Group Inc. (“AAG”) completed the public offering of 38,500,000 shares of common stock, par value $0.01 per share, of AAG (the “Common Stock” and such offering the “Common Stock Offering”).
In connection with the Common Stock Offering, on November 10, 2020, AAG entered into an underwriting agreement (the “Underwriting Agreement”) with BofA Securities, Inc. (“BofA Securities”) relating to the issuance and sale of the shares as described above. Under the terms of the Underwriting Agreement, AAG sold the Common Stock to BofA Securities at a price of $12.975 per share and, additionally, granted BofA Securities a 30-day option to purchase up to 5,775,000 additional shares of Common Stock on the same terms. The issuance and sale of 38,500,000 shares of Common Stock was completed on November 13, 2020. AAG expects to use the net proceeds from the Common Stock Offering for general corporate purposes and to enhance its liquidity position.
The Common Stock Offering is being made pursuant to AAG’s effective registration statement on Form S-3 (File No. 333-236503), initially filed with the Securities and Exchange Commission (the “SEC”) on February 19, 2020, and a prospectus supplement and accompanying prospectus filed with the SEC.
The Underwriting Agreement contains customary representations, warranties and agreements by AAG, customary conditions to closing, indemnification obligations of AAG and BofA Securities, including for liabilities under the Securities Act of 1933, as amended, other obligations of the parties and termination provisions. The representations, warranties and covenants contained in the Underwriting Agreement were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to such agreement, and may be subject to limitations agreed upon by the contracting parties.
The foregoing description of the Underwriting Agreement is not complete and is qualified in its entirety by reference to the full text of the Underwriting Agreement, a copy of which is filed as Exhibit 1.1 to this report and is incorporated by reference herein. A copy of the opinion of Latham & Watkins LLP relating to the legality of the issuance and sale of Common Stock in the Common Stock Offering is attached as Exhibits 5.1 to this report.