(Reuters) - Finnish flag carrier Finnair (FIA1S.HE) expects to launch a 500-million-euro ($542 million) rights offering, an amount that exceeds its current equity, in the second quarter, it said late on Tuesday.
Finnair reported deepening first-quarter losses last week and said it planned to raise around 500 million euros through a rights offering, saying it expected to lose around 2 million euros each day this quarter as most of its planes are grounded. It had not unveiled a timeline for the rights offering last week.
Airlines across the world are looking for ways to bolster their war chests - raising additional capital and cutting costs as the coronavirus pandemic has grounded most flights.
“The company plans to use the funds raised in the rights offering to strengthen the company’s balance sheet position and liquidity in the exceptional situation caused by the Covid-19 pandemic,” Finnair said in a statement late on Tuesday.
Shares of Finnair closed at 3.564 euros on Tuesday, valuing the company at 457 million euros. The company’s liquid cash funds were at 833 million euros at the end of March.
Finnair has signed up Citigroup (C.N) and Nordea (NDAFI.HE) as lead managers for the rights offering. The Finnish government, which holds 55.8% of the airline’s shares, plans to participate in the offering.
Reporting by Tarmo Virki in Tallinn; Editing by Leslie Adler