EasyJet raises another £203.6 million via aircraft sale and leaseback

on Aug 14, 2020
  • EasyJet raises another £203.6 million via aircraft sale and leaseback.
  • UK adds France, Malta, and the Netherlands to its quarantine list.
  • The budget airline's latest deal was with Jin Shan 37 Ireland Company.

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The British airlines have taken a massive hit due to the Coronavirus pandemic that wreaked havoc on travel and tourism in recent months. Amidst the chaos, EasyJet (LON: EZJ) has been committed to boosting liquidity to improve its balance sheet.

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In an announcement on Friday, EasyJet said it resorted to aircraft sale and leaseback to raise £203.6 million. It also expressed plans of continued efforts to explore further opportunities to shore up its finances. EasyJet also raised £419 million via a share sale in June. The British airline also announced in June that its pre-tax loss had widened to £353 million in the first half of the current fiscal year.  

UK adds France, Malta, and the Netherlands to its quarantine list

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While airlines are slowly resuming flights, COVID-19 restrictions are still in place and are likely to weigh on performance in the upcoming months. After introducing a two-week quarantine on all non-essential travel to Spain last month, the United Kingdom also added France, Malta, and the Netherlands on Thursday to its quarantine list. France marks a prominent holiday spot for Britons.

Despite the upgraded quarantine rules, easyJet said on Friday that its full schedule will remain operational in the upcoming weeks. According to the low-cost airline, leaseback or sale of 23 of its aircraft has raised £608 million in total so far. EasyJet said on Friday:

“EasyJet will continue to review its liquidity position on a regular basis and will continue to assess any further funding opportunities.”

EasyJet’s performance in the stock market

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Its latest sale and leaseback agreement was with Jin Shan 37 Ireland Company (an affiliate of BOCOMM Leasing) that entails 5 A321neo jets that resulted in a cash boost of £203.6 million. The deal concludes easyJet’s sale and leaseback plan that it had originally announced earlier this year in May.  

Shares of the company opened about 4.5% down on Friday. The stock continued to decline and tanked another 3% to 565 pence per share in the next hour. Compared to its year to date low of 475 pence per share in March, easyJet is still trading roughly 20% up.

EasyJet’s performance in the stock market was reported largely upbeat in 2019 with an annual gain of about 30%. At the time of writing, the Luton-based budget airline has a market cap of £2.60 billion and a price to earnings ratio of 9.60.  

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