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Investing.com -- AAR Corp. (NYSE:AIR) stock dropped 6.4% in after-hours trading Tuesday after the aviation services provider announced plans to offer 3 million shares of common stock.
The company, which serves commercial and government operators, MROs, and OEMs, said it would grant underwriters a 30-day option to purchase up to an additional 450,000 shares at the public offering price, less discounts and commissions.
AAR intends to use the proceeds to repay outstanding borrowings under its unsecured revolving credit facility and for general corporate purposes, which may include funding future acquisitions, according to the company’s statement.
Goldman Sachs & Co. LLC, Jefferies and RBC Capital Markets, LLC are serving as joint book-running managers for the offering.
The stock’s decline reflects typical market reaction to public offerings, which often lead to share price dilution for existing stockholders. Companies typically issue new shares to raise capital for debt reduction or expansion opportunities.
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