British engineering firm Rolls-Royce has successfully placed 94% of the new shares it has issued as part of a £ 2bn (approximately $ 2.64bn) borrowing rights issue aimed at supporting the company's balance sheet hit by the pandemic.
Airlines pay Rolls-Royce based on how many hours their engines fly, and the company's finances have come under a lot of pressure after borders were closed and most flights were canceled.
The increase in equity capital opens up new opportunities for borrowing, following the placement in October of 2 billion pounds of bonds and a bank loan of 1 billion pounds, as part of a total liquidity package of 5 billion pounds.
Rolls-Royce said that underwriting banks will now try to attract subscribers to the remaining shares, but, if unsuccessful, agreed to subscribe themselves.
Rolls-Royce CEO Warren East says the company could survive COVID-19 with a new liquidity package, given £ 1.3 billion in cost cuts, including the layoff of 9,000 workers and the closure of a number of factories. >