Meggitt shares sink over reports firm mulling equity raise
Engineering firm Meggitt has said it is reviewing its options after reports that the FTSE 250 firm was considering raising new equity to help bolster its finances.
Yesterday Bloomberg reported that the aerospace engineer was mulling a $600m (£455m) sale of new stock and was reviewing its debt with advisers.
Shares fell 6.2 per cent today on the back of the report, meaning its stock has now fallen 58 per cent in the year-to-date.
In a regulatory filing this morning, the firm said that it “continued trade in line with our internal expectations”.
“While there have been initial signs of a recovery in the civil aerospace sector, considerable uncertainty remains in relation to Covid-19.
“Against this backdrop, the group continues to review a range of trading scenarios and associated actions to mitigate any material adverse change to the industry outlook”, it went on.
The group added that it had liquidity of £856m and access to additional cash through the Bank of England’s Covid Corporate Finance Facility (CCFF).
Meggitt has already announced that it will cut 1,800 jobs this year as part of a major cost-cutting programme necessitated by the coronavirus pandemic.
The cuts, which represent 15 per cent of the engineer’s workforce, are part of a number of measures to be implemented in order to reduce expenditure by £400-£450m this year.
In recent weeks, a number of firms in the aviation sector have announced equity raises in a bid to firm up their finances as the disease continues to batter to industry.
Last week it was reported that engine maker Rolls-Royce was mulling a $1.5bn raise, while earlier in June airlines group IAG said it was looking to raise $2.75bn.