2019-05-13T015645Z_2090141273_RC115726BB00_RTRMADP_3_EASYJET-RESULTS-(Read-Only)
The share sale proved easy enough, and UK's leading discount carrier has built up a pile of cash for the difficult months ahead. Image Credit: Reuters

London: EasyJet Plc raised about 419 million pounds ($520 million) in a share sale, padding its coffers for the gearing up of flights as the European aviation sector emerges from the pandemic lockdown.

The stock offering, equal to almost 15 per cent of its existing share base, was placed at the price of 703 pence a share, representing a 5 per cent discount to the closing price on June 24, the London-based company said in a filing.

After the sale and an up-to 350 million pound sale-and-leaseback transaction for its aircraft, EasyJet said it will have more than 3 billion pounds of cash, which it has said would strengthen its balance-sheet and increase liquidity.

Britain's biggest discount airline was among the first European carriers to begin building up services again, and it said that its cash burn was slightly better-than-expected because more customers are opting to take vouchers instead of asking for refunds. EasyJet is restarting with mainly internal flights in the UK and France, after hunkering down for months due to flight restrictions during the region's coronavirus lockdown.

A distraction

Its bid to counter the impact of the virus has been further complicated by feuding with EasyJet's founder and largest shareholder, Stelios Haji-Ioannou, who has used the crisis to press a long-held demand for the airline to cancel a large aircraft order with Airbus SE. Last month, EasyJet fended off an effort by Haji-Ioannou to oust top management.

About one-third of the new placement will be subject to another shareholder vote, EasyJet said. It plans to hold the meeting around July 14.

Haji-Ioannou couldn't immediately be reached for comment on the share sale. He had previously called on the company to raise 600 million pounds in equity through a rights issue to existing shareholders, although he said that he would only consider participating if the jet order was canceled.

The stock is down 48 per cent this year.

All bets on summer travel

With COVID-19 infection levels on the decline in most of Europe, governments have been easing travel restrictions. Holiday spots including Greece, Spain and Portugal are seeking to win back passengers. Airlines are likewise trying to salvage the tail end of the summer season when tens of millions of people generally take their vacation.

The UK may also relax its controversial quarantine requirements for incoming passengers as early as next week, with the adoption of so-called air bridges.

EasyJet said revenue increased a 1.6 per cent in the first half, while reporting a pretax loss of 353 million pounds, including a 160 million pound charge for fuel hedges. The carrier said it wasn't possible to provide guidance for the remainder of the financial year, due to the coronavirus pandemic.