Ryanair issues shares to raise £357 million amidst COVID-19

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Written on Sep 4, 2020

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Ryanair issues shares to raise £357 million amidst COVID-19.
The budget airline had £3.48 billion in cash as of 30th June.
The Irish low-cost carrier values its debt at £1.70 billion.

Ryanair (LON: RYA) revealed to have strengthened its balance sheet on Friday with £357 million that it raised from shareholders to cushion the economic blow from the Coronavirus pandemic that has so far infected more than 335 thousand people in the United Kingdom and a little under 42 thousand deaths.

Shares of the company opened almost flat in the stock market on Friday. But Ryanair jumped roughly 5% in the next hour. It is now exchanging hands at £10.66 per share. In comparison, the Swords-based low-cost airline had tanked to as low as £7.27 per share. At the start of the year, it had a much higher per-share price of £13.33.

Ryanair has £3.48 billion in cash

According to Ryanair, roughly 3.2% of its share capital or 35,242,291 shares in total were issued at a per-share price of £10.13 that translates to a 2.6% discount on the price at which it closed the regular session in the stock market on Thursday. In August, Ryanair announced to have struck pay deals with 97% of its pilots and 90% of the cabin crew.

Europe’s largest budget airline also highlighted on Friday that the raised funds will contribute to streamlining its debt repayments for a minimum of 12 months. It will help the air carrier to seize opportunities attributed to COVID-19 disruptions.

In August, the count of passengers that Ryanair flew was reported about 50% down versus the same month last year. Its balance sheet, however, remained stronger than its competitors with over £3.48 billion in cash as of 30^th June. Ryanair also had roughly £6.25 billion worth of unencumbered Boeing 737 jets.

Ryanair values its debt at £1.70 billion

On the other hand, Ryanair’s debt is currently valued at £1.70 billion (maturing next year), including £600 million that it raised via the state-backed CCFF (COVID Corporate Financing Facility) scheme and another £759 million worth of Eurobond.

In related news, British Airways owner International Airlines Group (IAG) has named Louis Gallego as its new Chief Executive Officer. Gallego has previously served as the CEO of IAG’s subsidiary, Iberia, and is scheduled to take on the new role on 8^th September.

Ryanair’s performance in the stock market was fairly upbeat last year with an annual gain of roughly 40%. At the time of writing, the Irish budget airline has a market cap of £11.68 billion.