LONDON: British low-cost airline EasyJet, blighted by the coronavirus fallout, said today it has raised £419 million (RM2.2 billion) via a share placing as it tries to cope with disappearing demand for air travel.
One day after posting widening losses, the carrier said in a statement that it has placed more than 59.5 million shares, or almost 15% of its stock, at 703 pence per share.
EasyJet announced the placing on Wednesday to bolster its finances, as it also revealed that losses deepened in the first half as virus-related cancellations began to hit operations.
The airline, which is based in Luton north of London, posted a net loss of £324 million in the six months to the end of March, just as lockdowns were imposed across much of Europe.
Passenger numbers slid 7.4%, mostly due to the pandemic, as the airline said it benefited from less competition due to the bankruptcy of package holiday operator Thomas Cook. Revenues, however, rose by 1.6% to £2.4 billion.
The new equity will help boost its liquidity to about £3 billion, easyJet said, enabling it to survive for many more months even if planes are grounded again, and putting it in a strong position to cope with "protracted recovery scenarios".
EasyJet's planes returned to the air in mid-June, but with a minimal service as lockdowns to contain the pandemic were gradually eased. The airline is hoping to ramp up flying as the year goes on, but demand is being hampered by UK quarantine rules and consumer nervousness.
Its shares fell 5.4% to 699 pence in early trading today. They have approximately halved in value since the start of the year.
Bernstein analyst Daniel Roeska said the airline was already making progress with cost cutting.
"EasyJet has a compelling proposition of lower cost structures and strong positions in better markets. For investors looking to buy into the recovery in Europe, easyJet should be on the shopping list," he said in a note.
The group had already decided last month that it would axe up to 4,500 jobs, or almost a third of its staff, due to the dramatic slump in demand that is expected to persist despite easing travel restrictions.
The carrier follows rivals British Airways, Ryanair and Virgin Atlantic and others in slashing thousands of jobs to save costs as the bulk of planes remain grounded despite the relaxation of government lockdowns worldwide.
Separately today, Australia's Qantas announced plans to slash 6,000 staff and ground 100 planes for up to a year in a US$10 billion cost-cutting blitz in response to the Covid-19 crisis. – AFP, Reuters
source https://www.thesundaily.my/business/easyjet-raises-419m-via-share-placement-KY2625815
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