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Bloomberg
UK leisure airline Jet2 Plc raised 422 million pounds ($582 million) in new equity, adding to its cash reserves with travel virtually shuttered.
The new shares, representing about 20% of the carrier’s stock, were sold at 1180 pence each, a 9.1% discount from the closing price, Jet2 said in a statement.
“We estimate that Jet2 can now endure a no-flying scenario for over 12 months,†Jefferies analysts Becky Lane and James Wheatcroft wrote in a note to clients. The equity issue will mean Jet2 “can continue to take longer-term strategic decisions to support long-term profit growth.â€
Jet2 cancelled its flights through April 15 in response to new UK restrictions that require costly measures including hotel quarantine and multiple Covid-19 tests for many incoming travellers. As a result, travel has been essentially shut down.
“The proceeds will provide sufficient liquidity on an
extended and likely unpredictable shutdown basis to deal with this continually challenging trading environment,†Jet2 said. The company has sold assets and said that it’s consulting with the UK about its eligibility for government-backed Covid Corporate Financing Facility loans.