- Flight Centre (FLT) will raise $700 million to stay onboard during this COVID-19 pandemic
- Flight Centre plans to issue around 97.2 million in new shares at $7.20 each, representing a 27.3 per cent discount to the last traded price
- Flight Centre has previously closed a large number of leisure shops throughout the world
- But now things have worsened and it will close 50 per cent of its stores around the globe
- This accounts for more than 40 per cent of its Aussie stores
- Managing Director and CEO Graham Turner says this is the most challenging period he has ever encountered in over 30 years in business
- Flight Centre remains in a trading halt, with last trade at $9.91 per share on March 19
Flight Centre (FLT) will raise $700 million to stay onboard during this COVID-19 pandemic.
Flight Centre plans to issue around 97.2 million in new shares at $7.20 each, representing a 27.3 per cent discount to the last traded price of $9.91 on March 19.
Currently, the company has 101.14 million shares but, with this new raise, Flight Centre will be nearly doubling its shares. On February 25, shares were trading at $39.84 each.
The capital raising is fully underwritten and includes a $282 million institutional placement and a $410 million 1 for 1.74 entitlement offer.
After having record levels through to the end of February 2020, total global transaction value (TTV) fell in March, to 20-30 per cent of normal levels, due to the COVID-19 outbreak.
However, due to further travel restrictions in place, the TTV declines are expected to go down even further .
Flight Centre has previously closed a large number of leisure shops throughout the world. Now it has announced, it will close 50 per cent of stores around the globe, which will include more than 40 per cent of its Aussie stores.
Global Managing Director and CEO Graham Turner says this is the most challenging period he has ever encountered in over 30 years in business.
“It is inevitable that some businesses across our industry will fail, given the significant loss of revenue that they will be experiencing now and for at least the next few months,” he said.
“With this funding in place and additional liquidity, we are in a much stronger position and are well placed to weather a prolonged downturn, which currently seems the likely scenario, and to then take advantage of the significant opportunities that will arise once conditions normalise,” he added.
Flight Centre remains in a trading halt, with last trade at $9.91 per share on March 19.