EasyJet Raises $520m To Bolster COVID-19-Hit Finances
EasyJet has raised approximately £419 million through a share placing to help bolster its finances after the COVID-19 pandemic devastated the travel industry.
The new equity will help boost its liquidity to approximately £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. On Thursday June 25, it said that it will resume flights to Paris, Barcelona and Milan from Britain from July 1, as it restarts services from Manchester and London's Luton airport.
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.
Airlines are hoping Britain agrees travel deals with other countries to allow restriction-free movement between some European countries. A review of quarantine rules is due on June 29.
EasyJet said that it has placed a total of 59.5 million new ordinary shares at 703 pence apiece, after announcing the move late on Wednesday June 24.
Its shares were down 5.4% to 699.9 pence at 0915 GMT on Thursday June 25. They have approximately halved in value since the start of the year.
EasyJet has said that it does not expect passenger demand to recover to pre-pandemic levels until 2023, and is planning to axe up to 4,500 jobs.
Bernstein analyst Daniel Roeska said that the airline is already making progress with cost cutting.
"EasyJet has a compelling proposition of lower cost structures and strong positions in better markets," he said in a note.