SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Securities registered pursuant to Section 12(b) of the Act:
|Registrant||Title of each class|
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on which registered
|United Airlines Holdings, Inc.|
|United Airlines, Inc.||None||None||None|
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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Item 8.01. Other Events.
On December 9, 2019, United Airlines, Inc. (“United”) completed its funding of term loans to Avianca Holdings S.A. (“AVH”) in the aggregate amount of $150,000,000, pursuant to that certain Senior Secured Convertible Term Loan Agreement, dated as of November 18, 2019 and amended on December 5, 2019 (the “Loan Agreement”). The other lender in the facility, Kingsland International Group, S.A. (“Kingsland”), also funded term loans to AVH in the aggregate amount of $100,000,000 pursuant to the Loan Agreement, for total proceeds of term loans funded by both lenders to AVH (the “Loans”) of $250,000,000.
The Loans bear interest at 3% per annum, such interest to be paid-in-kind (and not in cash).
The Loans mature on the fourth anniversary of the funding date and are secured by a pledge of capital stock in the major subsidiaries of AVH and, until released, certain Colombian Peso-denominated credit card receivables owing to Aerovias del Continente Americano S.A. - Avianca, a subsidiary of AVH and guarantor under the loan Agreement.
The Loan Agreement contains various representations and warranties, covenants and events of default applicable to AVH and its subsidiaries.
Each of United and Kingsland may, at its election, convert its Loan into common shares, preferred shares or American Depositary Shares (representing preferred shares) (“ADS”) in AVH. The conversion price for voluntary or mandatory conversion of the Loans is $4.6217 per ADS (or per eight preferred shares or common shares), representing a 35% premium to the 90-day volume-weighted average price, through October 3, 2019, of $3.4235. Following the occurrence of an AVH “change of control” (as such term is defined in the loan agreement), the conversion price will be reduced to $4.1595. The conversion price and interest rate are subject to further adjustment upon occurrence of certain events. Additionally, the Loan Agreement includes certain preemptive rights for the lenders.
Additionally, AVH may, on or after the day occurring 360 days after the funding date of the Loans, require that United and Kingsland convert the Loans into AVH shares (into the type elected by United and Kingsland, respectively) if the following conditions are satisfied: (a) (i) AVH’s ADSs are trading at or above $7.00 on a volume-weighted average price basis for 112 of 150 consecutive trading days (if such conversion occurs on or prior to the first anniversary of the funding of the Loans) or (ii) AVH’s ADSs are trading at or above $7.00 on a volume-weighted average price basis for 90 out of 120 consecutive trading days (if such Conversion occurs after the first anniversary of the funding of the Loans); (b) AVH’s consolidated average total cash balance is equal to or greater than $700,000,000 over the immediately preceding six-month period; (c) no defaults exist under the Loan Agreement and related documents; and (d) there is no material litigation.
AVH has obtained commitments for additional financing which, if funded, would also be secured by some or all of the collateral described above securing the Loans.
Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|UNITED AIRLINES HOLDINGS, INC.|
|UNITED AIRLINES, INC.|
|By:||/s/ Gerald Laderman|
|Title:||Executive Vice President and Chief Financial Officer|
|Date: December 9, 2019|