British Airways mulls €2.8b share issue
On Friday, its stock fell more than 4% following the Reuters story on the rights issue
LONDON:
British Airways owner IAG said it is drawing up plans for a possible rights issue of up to €2.75 billion ($3.20 billion) to strengthen its balance sheet.
International Consolidated Airlines Group made the statement after Reuters reported that it was planning a rights issue of up to €2.5 billion, citing three sources. 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.
On Friday, its stock fell more than 4% following the Reuters story on the rights issue. IAG said that no final decision has been made on whether or when to proceed with the rights issue, where new shares are offered to existing shareholders at a discount.
Two sources had earlier told Reuters that the company was targeting the end of the summer for the capital raise, which would keep the business afloat and avoid a government bailout. “Being a rescue deal, investors will undoubtedly prefer to have more visibility on air traffic during the summer months,” one said.
Published in The Express Tribune, July 26th, 2020.
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