BA owner IAG says group will not tap investors for recovery funds
British Airways owner IAG will not follow in Easyjet’s footsteps by raising billions of euros from shareholders to pull through the extended Covid crisis, the group’s chief executive has said.
City eyes had turned to IAG with the expectation that it would be forced to follow Easyjet, whose shares nosedived earlier this month when it tapped investors for a £1.2bn rights issue to bolster its Covid recovery.
But the BA parent company has no such plans, according to chief executive Luis Gallego, who told the Sunday Times: “We do not see the necessity to do a rights issue and are not considering it.”
Instead, IAG is talking through “different options” with banks as it plans its recovery, according to Gallego, who also highlighted the group has robust liquidity of €10.2bn (£8.7bn) and will focus on repaying its high debts.
It comes four months after IAG announced plans to raise €825m (£704m) from a convertible bond in an effort to shore up its finances amid the group’s sluggish recovery from the coronavirus pandemic.
In July last year, the Covid-stricken group said it would raise £2.5bn in a rights issue just five weeks after Easyjet tapped markets for £419m – adding to speculation that IAG would do the same this time round.
Alongside its announcement of the new £1.2bn rights issue earlier this month, Easyjet rejected an unsolicited takeover bid from Wizz Air.
Pressed on whether IAG would make a bid of its own, Gallego said that the budget airline was “on the radar” and IAG “talk[s] to all airlines that can be interesting to us,” but that repaying debt is the main priority.