LONDON (Reuters) – Britain’s Rolls-Royce
The pandemic has battered Rolls’s finances as airlines pay the company according to how many hours its engines fly in wide-body jets. Worries that a recovery in travel will take years have pushed its share price down by 80% this year.
Rolls said on Thursday that the 10 for 3 heavily discounted rights issue was fully underwritten at 32 pence per share, a 41% discount to the closing price of 130 pence per share on Wednesday.
In May, the company said it would cut 9,000 jobs as a result of the pandemic and its finances have been the subject of media speculation since.
“The capital raise announced today improves our resilience to navigate the current uncertain operating environment,” said Chief Executive Warren East in a statement.
Rolls, a key supplier to the government on military programmes, said that the UK government through UK Export Finance has also indicated it was ready to support an extension of its 80% guarantee of Rolls’ existing 2 billion pound five-year term loan.
It would support a loan amount increase of up to 1 billion pounds.
That is on top of commitments for a new two-year loan facility of 1 billion pounds, the company said.
(Reporting by Sarah Young; editing by Kate Holton)
