for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up

IAG shareholders back $3.3 billion rights issue as Walsh steps down

LONDON (Reuters) - Shareholders backed IAG's ICAG.L plan to raise 2.75 billion euros ($3.25 billion) in equity at a virtual meeting on Tuesday that saw the airline group's long-time CEO Willie Walsh hand over to insider Luis Gallego.

Walsh had delayed his March departure from the company he created in 2011 by merging British Airways and Iberia to help navigate the COVID-19 pandemic.

The format of the annual general meeting, with chairman Antonio Vazquez in Madrid, Walsh in London and shareholders watching online, underlined how much has changed.

“It is the worst crisis we have ever faced, far worse than both 9/11 and the financial crash in 2008,” Walsh said.

“We are having to re-calibrate everything we do as we anticipate that it will take until at least 2023 or 2024 for passenger demand to recover to 2019 levels.”

The damage inflicted on IAG’s finances was clear in the second quarter, when it plunged to an operating loss of 1.37 billion euros from a 960 million euro profit a year earlier.

Walsh has cut costs and increased liquidity, led by the planned rights issue, backed by its biggest shareholder Qatar Airways.

The increase in shares necessary for the capital increase was backed by more than 99% of votes.

The virtual format meant Walsh received none of customary applause from shareholders.

But he said it had been “one hell of a journey”, and he was delighted his replacement was a “natural successor”, who had shown “world class” leadership at Iberia.

“No one could have imagined the challenge he (Gallego) would face when he took up his new role”, Walsh said, but he was confident the Spaniard was “exactly the right man for the job”.

Walsh cleared one final hurdle: a non-binding vote on the directors’ pay report for 2019, which included his bonus of 883,000 pounds ($1.16 million).

The resolution received the backing of 71.6% of votes cast.

($1 = 0.8473 euros)

Additional reporting by Laurence Frost in Paris, editing by Louise Heavens and Mark Potter

for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up