As the airline sector grapples with the Omicron coronavirus type, American Airlines said on Wednesday it was seeking shareholder approval for a rights offering plan to forestall any hostile takeovers and maintain a $16.5 billion tax advantage.
The world's largest airline stated it has $16.5 billion in net operational loss carryforwards in the United States, which might be jeopardized if the company's ownership changes.
Due to pandemic-related limitations and lockdowns, the business recorded a record annual loss of $8.9 billion in January of this year.
The airline announced that it has implemented a tax advantage preservation plan to help it reduce future federal income tax expenses.
For each outstanding share of American Airlines common stock, the plan will issue one preferred stock purchase right in the form of a dividend.
The dividend will be paid on January 5, 2022, according to the corporation, but only if a person or group acquires a holding of 4.9 % or more without the board's agreement can shareholders exercise their rights.
If authorized, the rights will allow shareholders to purchase stock in the world's largest airline at a 50% discount.
If no shareholder consent is obtained, the rights will expire on December 20, 2022, according to the airline. They will expire in December 2024 if not renewed.