|
|
|
|
|
|
ITEM 1.01.
|
ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
|
As previously disclosed, on April 23, 2021 (the “PSP3 Closing Date”), American Airlines, Inc. (“AAI”), Envoy Air Inc. (“Envoy”), Piedmont Airlines, Inc. (“Piedmont”) and PSA Airlines, Inc. (together with AAI, Envoy and Piedmont, the “Guarantor Subsidiaries”), each a wholly-owned subsidiary of American Airlines Group Inc. (the “Company”), entered into a Payroll Support Program 3 Agreement (the “PSP3 Agreement”) with the United States Department of Treasury (the “Treasury”), with respect to the Payroll Support Program (“PSP3”) established under Section 7301 of the American Rescue Plan Act of 2021 (the “ARP”). In connection with its entry into the PSP3 Agreement, on the PSP3 Closing Date, the Company also entered into a warrant agreement (the “PSP3 Warrant Agreement”) with the Treasury, and the Company issued a promissory note to the Treasury (the “PSP3 Promissory Note”), with the Guarantor Subsidiaries as guarantors. These transactions are more fully described in the Current Report on Form 8-K filed by the Company and AAI on April 26, 2021 (the “April 8-K”).
As contemplated by the PSP3 Agreement and the April 8-K, on June 24, 2021, AAI and the Subsidiaries received the second installment of PSP3 financial assistance in the aggregate amount of approximately $1.6 billion and in connection therewith increased the amount of the PSP3 Promissory Note by approximately $479 million and issued to Treasury a warrant to purchase an additional 2,204,137 shares of the Company’s common stock at an exercise price of $21.75 per share (the “Additional PSP3 Warrant”). After taking into account this second installment, the Company has received approximately $3.25 billion of PSP3 financial assistance, for which the Company has now provided Treasury with a Promissory Note in an aggregate amount of approximately $946 million and Warrants to purchase up to 4,349,563 shares of the Company’s common stock.
The Additional PSP3 Warrant will be filed as an exhibit to the Company’s and AAI’s Quarterly Report on Form 10-Q for the period ended June 30, 2021 to be filed with the Securities and Exchange Commission.