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Bloomberg
EasyJet Plc raised about 419 million pounds ($520 million) in a share sale, padding its coffers for the gearing up of flights as the European aviation sector emerges from the coronavirus lockdown.
The stock offering, equal to almost 15% of the existing share base, was placed at the price of 703 pence a share, representing a 5% discount to the closing price on June 24, the Luton, England-based company said on Thursday in a filing.
EasyJet said it will now have more than 3 billion pounds of cash, taking into account as much as 350 million pounds to be raised from sale-and-leaseback transactions on its aircraft. Liquidity has also been boosted by a slightly lower-than-expected cash burn as more customers opt to take vouchers for canceled flights instead of asking for refunds.
Britain’s biggest discount carrier was among the first European airlines to begin building up services as lockdowns eased, resuming internal flights in the UK and France. The number of British airports served will increase to 14 from next week, with more international flights added. EasyJet plans to operate 50% of its usual routes in July and 75% in August, though lower frequencies mean third-quarter capacity will be down about 30%.
The shares traded 5.8% lower at 10:21 am in London, taking their value down by half since the start of the year.
“The positive signal of ‘flying again’ combined with the current developments across Europe in reducing the severity of social distancing measures and lockdowns should support bookings,†Daniel Roeska, an analyst at Bernstein wrote in a note. “As long as bookings start increasing, the cash flow for the company may well be positive during the startup.†Profitability may only return in the second half of 2021, he added.