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UK’s EasyJet raises $520 mn through a share sale

EasyJet share sale
The stock offering equal to almost 15% of its existing share base

UK-based low-cost carrier EasyJet has raised around $520 million in a share sale as the carrier gears up to restart its operation, the media reported.

The stock offering equals to 15 percent of its existing share sale was placed at the price of 703 pence a share, representing a 5% discount to the closing price on June 24, according to EasyJet.

The share sale is expected to take EasyJet’s total cash in hand up to £3 billion.

Daniel Roeska, an analyst at Bernstein wrote in a note, “The positive signal of ‘flying again’ combined with the current developments across Europe in reducing the severity of social distancing measures and lockdowns should support bookings. As long as bookings start increasing, the cash flow for the company may well be positive during the startup.” Profitability may only return in the second half of 2021.”

The carrier has also sold or leased back a part of its fleet in a deal worth $250 million, according to reports in the media.

According to EasyJet, the aircraft will be sold to SMBC Aviation Capital and leased back for terms of between 110 and 122 months.

The carrier will use the funds raised from the A320 neo aircraft will be used to maximise liquidity and further strengthen its financial position.

It said in a statement, “EasyJet and SMBC Aviation Capital have also identified other unencumbered aircraft in the easyJet fleet and, if easyJet decide to sell these aircraft over the next 18 months, SMBC Aviation Capital will be our preferred partner for the transaction under financial metrics equivalent to those already established in the transaction announced today.”

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