EasyJet reports 93% take-up of $1.6 billion rights issue

FILE PHOTO: EasyJet airplanes are parked on the tarmac during the official opening of the new Berlin-Brandenburg Airport (BER) “Willy Brandt”, in Schoenefeld near Berlin, Germany October 31, 2020. REUTERS/Hannibal Hanschke/Pool/File Photo

LONDON (Reuters) -British airline easyJet said it had received acceptances from investors for 93% of the new shares it sold as part of a 1.2 billion pound ($1.64 billion) fully underwritten rights issue designed to help fund its recovery from the pandemic.

The airline announced the cash call, its second during 18 months of COVID-19, earlier this month, at the same time as revealing it had rejected a takeover approach from an unnamed suitor, believed to be low cost rival Wizz Air.

EasyJet’s biggest shareholder, the family of founder Stelios Haji-Ioannou, decided not to participate in the rights issue, and their stake is set to reduce to around 15% from 25% when the shares go live at 0800 GMT on Tuesday.

The founder has in the past clashed with management over its growth plans.

EasyJet’s chief executive, Johan Lundgren, said the extra funds would enable it to take advantage of new opportunities likely to arise as carriers like British Airways-owner IAG, Air France-KLM and Lufthansa retreat.

“The success of this capital raise, thanks to great support from investors, will enable easyJet to strengthen its balance sheet and accelerate its post-COVID 19 recovery plan,” he said in a statement on Tuesday.

The underwriting banks on the issue will now try to find subscribers for the remaining 21 million shares not taken up by shareholders in the 31 for 47 rights issue, and if they can’t, will subscribe for the stock themselves.

($1 = 0.7311 pounds)

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