Log inLog Out
For YouNewsEntertainmentRelationshipLifestyleSportTechnology
Coronavirus: Rolls-Royce launches £5bn plan to repair battered finances

festo

Oct. 01, 2020

Rolls-Royce has confirmed plans to raise £2bn from shareholders and billions more in debt as it battles to shore up its finances after a "sharp deterioration" caused by the coronavirus crisis.
The package includes "support in principle" from the government to extend an 80% guarantee for an existing £2bn five-year loan, which the struggling group wants to increase by up to £1bn.
Rolls-Royce has also agreed a separate two-year borrowing facility with lenders of £1bn and plans to tap bond markets for a further £1bn.
Shares opened 7% lower after Rolls-Royce announced the plans, which will see existing shareholders offered new stock at a sharp discount to its previous closing price.
The stock had already collapsed by 80% in the year to date before the rights issue was announced.
Rolls-Royce's finances have been battered by a collapse in aviation caused by the
Airlines pay the company according to how many hours its engines fly. New engine deliveries have also slumped.
In May, the Derby-based group said it was
Last month, it reported a
Announcing today's cash call, chief executive Warren East said: "The sudden and material effect of the COVID-19 pandemic has had a significant impact on the commercial aviation industry."
Mr East said there had been a "sharp deterioration in the financial performance" of its civil aerospace business and "to a lesser extent" its separate power systems business, which serves customers in marine and infrastructure sectors.
"We are undertaking decisive and transformative action to fundamentally restructure our operations, materially reduce our cost base and improve our financial position," Mr East said.
"The capital raise announced today improves our resilience to navigate the current uncertain operating environment."
On Wednesday,
0
Comments
Sign in to post a message
You're the first to comment.
Say something
Recommend
Log in