One of Liverpool Airport’s biggest carriers, easyJet, has raised £1.2bn through a new rights issue to aid its recovery and says it has ‘unanimously’ rejected a takeover bid. Tony McDonough reports
Low cost airline easyJet has raised £1.2bn via a new rights issue and also says it has rejected a takeover offer for the company.
In a statement to the stock exchange on Thursday morning easyJet, one of the biggest carriers at Liverpool John Lennon Airport along with Ryanair, said it had also secured a new $400m (£290m) four year revolving credit facility.
With the COVID-19 pandemic still a drag on the European aviation sector, easyJet wants to ensure it has enough liquidity to see it through what it expected to be a long recovery. It is not expecting to return to pre-pandemic levels of demand until 2023.
The statement said: “Having acted decisively over the last 18 months, easyJet is well-placed to emerge from the pandemic with renewed strength the potential to capitalise on growth opportunities that will create value for shareholders.
“The company expects considerable long-term strategic and investment opportunities to arise as the European aviation market recovers, in particular as legacy carriers restructure their short-haul operations.”
Along with Ryanair, easyJet believes it can capitalise on the woes of other European airlines that have fared less well over the past 18 months. It wants to take the opportunity to buy up landing slots vacated by other carriers.
The takeover approach for easyJet came from an unnamed bidder. The preliminary offer was “unanimously rejected” by the board and the bidder was not considering a further offer.
Johan Lundgren, chief executive of easyJet, said: “The capital raise announced today not only strengthens our balance sheet enabling us to accelerate our post-COVID-19 recovery plan, but will also position us for growth so that we can take advantage of the strategic investment opportunities.
“Since the onset of the pandemic, we have undertaken decisive and robust action to restructure our operations, addressed our cost base and secured our financial position, keeping our investment-grade credit rating.
“We have worked hard to maintain our customer friendly brand and network and been rewarded with immediate growth in demand when travel restrictions have been lifted.”