BA lays out fund-raising plan
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British Airways (BA) plans to raise more than GBP600 million (US$980 million) to help it weather the global economic downturn, the BBC has reported. The UK flag-carrier will issue GBP350 million in convertible bonds to existing shareholders and also release bank guarantees from its pension schemes.
BA has predicted a GBP100 million loss for the three months ending 30 June 2009. But it added that this was “slightly better than market expectations”.
“Following discussions with institutional investors, we’re taking action to improve our liquidity and strengthen our position within the industry,” BA’s Chief Executive Officer, Willie Walsh, was reported saying. “This goes hand-in-hand with our cost reduction and efficiency initiatives, which are designed to create the right conditions for our sustainable, long term profitability,” he added.
BA said the new funding would increase liquidity at the airline from GBP1.25 billion to about GBP2 billion.
Walsh said the move “puts to bed the suggestions that British Airways is in any sort of risk in the short term”.
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