World News – GB – Rolls-Royce secures increased funding to deal with turmoil due to pandemic


Aerospace company takes giant leap in strengthening crisis-hit finances as investors back £ 2bn fundraising appeal

Rolls-Royce has secured backing to attract investors for £ 2bn and secure a heavy war chest to weather the coronavirus crisis

The aerospace company – hit by a pandemic drop in revenues – has asked shareholders to back the sharply reduced rights issue on the grounds that it would release £ 3bn of additional debt options to deal with the disruption of COVID-19

Rolls, which is paid according to the number of hours its engines have flown, had said having the extra £ 5 billion at its disposal would eliminate « any liquidity issue during this crisis »

During the fundraising, existing investors offered 10 new shares for every three they own at 32 pence each – a reduction of over 40%

Managing Director Warren East had placed consolidating the company’s finances high on his agenda after « sharp deterioration » that resulted in a record loss of £ 5 per semester4 billion

Rolls has launched a £ 1 billion cost reduction plan, including 9,000 job cuts, due to collapsing demand for international travel

He confirmed a development, first reported by the Financial Times, that staff were made aware of the possibility of temporary factory closures and reductions in working hours and benefits as the crisis evolves

M East told investors ahead of the rights vote: “We didn’t want to endanger the company and the interests of our shareholders by betting on what the situation might look like in the middle of next year. »

Stocks, which remain down two-thirds since the start of the year, were trading 24% lower on Tuesday

© 2020 Sky France

Rolls-Royce Holdings, Finance, Rights issue

News from around the world – GB – Rolls-Royce secures increased funding in the face of turmoil due to pandemic



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