American Air gives third mandatory conversion notice for preferreds

By Susanna Moon

Chicago, March 10 - American Airlines Group Inc. said it gave notice to holders of its series A convertible preferred stock that 41,963,700 shares of the preferreds will be converted into common shares on Monday.

By operation of the mandatory conversion mechanism contained in the certificate of designations, each holder will have about 70.48% of its preferreds mandatorily converted, according to a company press release.

The number of shares issued will be based on the conversion price of $33.8080. For each $1,000 amount, holders will receive 29.5788 shares; equivalently, each preferred mandatorily converted will be converted into 0.7510 shares, subject to rounding.

The next mandatory conversion date will occur on April 8. All outstanding shares of convertible preferreds will convert to common stock on that mandatory conversion date. The conversion ratio will be set using the volume-weighted average price of the company for the five trading days prior to April 8.

The fourth optional conversion period will begin on March 13.

Additional stock distributions

Under the company's fourth amended joint plan of reorganization, shareholders who received an initial distribution of the company's shares in connection with the effective date of the plan will receive, for each share of previously owned stock, a distribution of about 0.1842 shares on March 10, the release noted.

Holders may receive additional distributions based on the trading price of the company's stock during the 120-day period after the effective date and the total amount of allowed claims.

Holders of convertible notes who elected to be treated as if they had converted their notes to common stock prior to the effective date will also receive a distribution of stock. Those who held the 6.25% convertible senior notes due in 2014 and elected to be treated as if they held common stock will receive 20.1853 shares for each $1,000 of principal amount, and those who held the 4.5% convertible senior notes due 2024 and elected to be treated as if they held stock will receive 9.000 shares for each $1,000 principal amount on March 10, the company said.

The American Airlines holding company is based in Fort Worth.

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