Finnair (AY, Helsinki Vantaa) has launched plans to raise EUR500 million euros (USD543 million) in a rights offering, the airline said in a statement on April 29. This sum was greater than the company's equity after first-quarter losses were posted on the same day.
The flag carrier said that Citigroup and Nordea would act as lead managers in the rights issue. The Finnish government, which holds a 55.8% stake in the airline, has supported a supplementary budget to cover its participation in the offering, which will now be set before the country's parliament.
Authorisation for the rights issue will be sought at an upcoming Annual General Meeting due to be held at the end of May.
“The coronavirus has had an unprecedented impact on global aviation and also on Finnair. We want to ensure with this share issue that Finnair is a competitive airline also in the future by significantly strengthening the equity,” CEO Topi Manner explained in the statement.
Shares in the company fell 10.7% in April 29 morning trading to EUR3.81 (USD4.14), according to Reuters, valuing it at EUR488 million (USD530 million). Its liquid cash funds stood at EUR833 million (USD905 million) at the end of the first quarter on March 31, including a raised EUR175 million (USD190 million) revolving credit facility.
“In the event that these exceptional circumstances continue, we have drawn up an additional financing plan, which includes a EUR600 million [USD652 million] pension premium loan to be drawn, if necessary, as well as aircraft sale and leaseback arrangements. Even if the coronavirus situation continues, Finnair's cash position will be secured beyond the first half of 2021,” Manner assured.
Finnair said it anticipated a daily loss of around EUR2 million (USD2.17 million) per day throughout the second quarter, despite cost adjustments. Manner added: “We expect aviation to recover slowly from July onwards and passenger numbers to return to 2019 levels in two to three years.”
