Thursday 25 June 2020 8:31 am

Easyjet raises £419m through share placing to bolster finances

Low-cost carrier Easyjet today announced that it had raised £419m through a share placing in order to help it withstand the coronavirus pandemic.

In total, the budget airline placed 59.5m ordinary new shares – 15 per cent of the firm’s existing share capital – at a price of 703p per share.

Read more: Easyjet resumes flights with social distancing measures in place

The placing price represents a five per cent discount on yesterday’s closing share price of 740p.

The raise, which was announced after markets closed yesterday, is the latest move Easyjet has made to bolster its liquidity during the current crisis.

Prior to the raise, the airline said it had a cash position of £2.4bn, with net debt of £467m. Easyjet has already drawn down £600m from the Bank of England’s Covid Corporate Financing Facility to withstand the financial pressure of the pandemic.

Chief executive Johan Lundgren said that the placing would “further enhance Easyjet’s liquidity position, credit metrics and already strong balance sheet through the Covid-19 recovery”. 

Before the Open newsletter: Start your day with the City View podcast and key market data

Yesterday the airline released its results for the first half of the current financial year, up to the end of March, saying it was trading ahead of expectations for the period.

Easyjet made a headline loss of £193m, which was better than its performance in the same period the year before, where it lost £275m.

A “significant number of flight cancellations” at the end of March due to the onset of the pandemic drove passenger numbers down 7.4 per cent to 38.6m.

Read more: British Airways, Ryanair and Easyjet launch quarantine legal action

However, Easyjet said that it had already secured £1.7bn in funding to protect it from the crisis, adding it was “well positioned for the recovery” from the pandemic.

It added that flying capacity was expected to build up through the summer season, with the airline targeting 30 per cent of pre-coronavirus capacity by the fourth quarter.