Friday, July 17, 2009

British Airways To Raise GBP600M Of Cash Funding

LONDON (Dow Jones)--British Airways (BAY.LN), a U.K. airline, said Friday it plans to raise GBP600 million of cash funding to ensure it has strong liquidity consistent with the current difficult trading conditions.


-Launches GBP300 million convertible debt issue, which will be conditional on approval from shareholders.

-Funding expected to add GBP600 million of further liquidity bringing it to total of GBP2 billion.

-Revenue of GBP1.98 billion expected in first quarter ending June 30.

-Operating loss of around GBP100 million, which is slightly better than market expectation.

-GBP1.25 billion of cash and general facilities of around GBP130 million as at June 30.

-Securities will be senior unsecured convertible bonds due in 2014 which will be convertible into 15-20% of issued ordinary share capital of British Airways.

-Final size of offering will be determined at the time of pricing, which expected to be later Friday.

-Eligible existing institutional shareholders will be given opportunity to take up a pro rata allocation if they wish.

-Agreed terms with trustees of defined benefit pension schemes in U.K. to release some bank guarantees back to airline.

-Guarantees were provided in 2006 and were accessible by trustees only in event of airline's insolvency.

-Consequently up to $540 million (approximately GBP330 million) of bank facilities will become available for airline to draw in cash at any time until June 21, 2012.

-Already obtained facilities of more than $3 billion (GBP1.9 billion) specifically against future aircraft deliveries.

-Bookbuilding process will close prior to announcement of the final terms of convertible bonds which is expected to be made Friday and closing is expected on or about Aug. 13.
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