Rolls-Royce shareholders approve £2bn rights raise plan
Rolls-Royce shareholders have this morning approved the engine maker’s £2bn rights issue as it seeks to bolster its finances.
As a result, the group’s liquidity will rise by £5bn, as the capital raise opens up new options including a £2bn bond issue and the extension of a two-year loan by £1bn.
Chairman Ian Davis told an online meeting that the resolution had passed “overwhelmingly”.
A later filing showed that 99.5 per cent of shareholders had voted in favour of the move.
Shares in the blue-chip stock rose initially, but then fell 2.1 per cent in the early afternoon.
Rolls-Royce’s market capitalisation has shrunk by more than 80 per cent in the last year.
The pandemic has hammered the FTSE 100 firm because airlines pay the company according to how many hours its engines fly in wide-body jets.
In August the firm said that it had posted a £5.4bn loss in the first half of the year due to the slump in air travel caused by coronavirus.
International air travel still remains at historic lows, with many carries cutting capacity over the winter due to increasingly strict travel restrictions.
Rolls-Royce forecast a £1bn outflow in the second half of the year, after burning through £3bn in the first six months.
The Derby-based firm cut at least 9,000 jobs in May. It said last month that it also plans to sell off its Spanish unit ITP Aero among other assets.
More to follow.