Atlas Air Worldwide Holdings (NASDAQ:AAWW), Amazon.com, Inc. (NASDAQ:AMZN) - Amazon to Lease 10 More

To no one's surprise, Amazon.com, Inc. and one of its aircraft operating partners, Air Transport Services Group (NYSE: ATSG), said today that ATSG will lease to Amazon 10 of the 20 Boeing 767-300 extended-range passenger planes that ATSG said yesterday it would acquire and convert into freighter equipment.

At the same time, Amazon.com, Inc. (NASDAQ: AMZN) and ATSG have agreed to solidify their existing financial and operational ties. ATSG said in a statement it will issue warrants to Amazon that, if fully exercised, would increase the Seattle-based e-tailer's stake in ATSG to 33.2 percent. The warrants, which have an exercise price of $21.53 a share, would expire sometime in 2026, ATSG said. Amazon would also receive "warrant rights" potentially boosting its ATSG ownership to 39.9 percent should it lease 17 additional cargo planes, beyond the 10 announced today, before January 2026, ATSG said.

Amazon already holds warrants that if fully exercised before March 2021 would represent a 19.9 percent ownership stake in Wilmington, Ohio-based ATSG. ATSG will require shareholder approval to increase the number of common shares required to fulfill the warranty obligations. It plans to submit a proposal at its annual meeting on May 19.

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In addition, ATSG and Amazon, which already leases 20 767s from ATSG, will extend the duration of the lease agreement on 12 of the planes by two years to March 2023. The agreement covering the remaining 8 aircraft will be exten....

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