Status: 09.09.2021 2:10 p.m.
Easyjet is raising fresh money through a capital increase to cope with the consequences of Corona. The British low-cost airline wants to do it alone, he turned down a competitor’s offer to buy.
Easyjet wants to raise billions of dollars from investors by issuing new shares. The money is to be used to cope with the financial consequences of the corona pandemic, as air traffic around the world has practically come to a standstill in recent months. Many airlines, including Lufthansa, have got into an existential crisis.
The issuance of new shares should bring in about 1.2 billion British pounds, or about 1.4 billion euros, said the management of Easyjet. This corresponds to around a third of the previous market value; the airline is currently worth around 4.2 billion euros on the stock exchange.
In addition, Easyjet has secured a new line of credit for 400 million US dollars, equivalent to 338 million euros, for the next four years.
Who wanted to buy Easyjet?
Management also announced that Easyjet had rejected a competitor’s takeover offer. After a thorough examination, the board of directors unanimously rejected the offer because the purchase price offered was below the company value. The bidder has meanwhile declared that it is no longer interested, it said.
In the past there had been rumors that the British Airways parent company IAG wanted to buy the low-cost airline. Meanwhile, Lufthansa cannot take over an airline until it has paid back most of the state rescue package.
The news agency Reuters reports, citing an insider, that the bidder is competitor Wizz Air from Hungary. Neither Wizz Air nor Easyjet have confirmed this so far. The airline Wizz, which is also listed in London, came through the pandemic crisis better than its competitors. It benefits from the east-west labor migration in Europe, as many Eastern Europeans want to fly home cheaply.
According to its own information, Wizz Air carried 200 million passengers a year with a fleet of 120 aircraft before the Corona crisis in 2019. Easyjet counted only half as many passengers with a fleet of a good 300 machines.
Easyjet is recovering more slowly from the collapse in passenger flights due to travel restrictions in the pandemic as they are still quite restrictive in the UK. From July to September, the airline only offers 57 percent of the pre-crisis capacity, while rival Ryanair had 75 percent of the passengers on board in August and Wizz Air more than 85 percent.
On the stock exchange, the news about the planned capital increase did not go down well, with stocks falling by more than ten percent at times. For existing shareholders, a capital increase is usually bad news because it dilutes the value of their own company shares. So the share of the profit decreases somewhat and the voting rights have to be divided by more shares.