Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Breaking News

Facebook, PayPal, Uber Fall Premarket; Ford Rises

British Airways owner to raise up to 2.5 billion euros with share issue: sources

Stock MarketsJul 24, 2020 08:50AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: British Airways planes are seen at the Heathrow Airport in London

By Clara Denina , Pamela Barbaglia and Abhinav Ramnarayan

LONDON (Reuters) - British Airways owner IAG  (L:ICAG) is set to issue shares at the end of the summer in a bid to raise up to 2.5 billion euros ($2.88 billion) to keep the business afloat and avoid a government bailout, several sources said.

International Consolidated Airlines Group (L:ICAG) is most likely to raise capital with a rights issue, where new shares are offered to existing shareholders at a discount, by the beginning of September, two of the sources added.

Other options, such as an equity placing and a concurrent issuance of convertible bonds are also being considered, the sources said.

"Being a rescue deal, investors will undoubtedly prefer to have more visibility on air traffic during the summer months," one said.

IAG's share price has lost 66% of its value since the start of the year, as global air travel came to a halt during the coronavirus crisis.

The Anglo-Spanish group, which also owns Iberia and Aer Lingus, renewed a 750 million pound ($955 million) partnership multi-year deal with American Express (NYSE:AXP) on Friday.

IAG declined to comment.

With passenger numbers decimated this year and experts forecasting it will be years before they recover, global airlines began sweeping restructuring processes and in many cases sought state assistance.

Air France (PA:AIRF) secured a 7 billion euro aid package from the French government and Lufthansa (DE:LHAG) agreed a 9 billion euro government bailout.

IAG, which is also reviewing a planned 1 billion euro acquisition of Spanish carrier Air Europa because of the harsh economic climate, has not asked for a specific government bail-out but has taken advantage of state-backed loan schemes in Britain and Spain. British Airways has warned it needs to cut 12,000 jobs.

Spanish airlines Iberia and Vueling have secured 1 billion euros of government-backed loans in May. BA has also accessed the UK coronavirus corporate finance facility and used the government's furlough schemes.

The company is working with U.S. investment banks Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS) and its corporate brokers Barclays (LON:BARC) and Deutsche Bank (DE:DBKGn) on the plan, the sources said, expecting an announcement could coincide with results on July 31.

DB and Barclays declined to comment. GS and MS did not respond to a request for comment.

IAG reported a first-quarter operating loss before exceptional items of 535 million euros and expects significantly worse losses in the second quarter, reflecting the full extent of travel lockdowns during the pandemic.

(Graphic: Bumpy ride: IAG shares still near the bottom link: https://fingfx.thomsonreuters.com/gfx/mkt/yzdvxnrxmvx/iag%20graphic.png)

British Airways owner to raise up to 2.5 billion euros with share issue: sources
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email