EasyJet Secures $ 1.87 Billion State Guaranteed Loan As It Seeks To Alleviate COVID Cash Crisis
Low cost airline easyJet EZJ,
on Monday secured a $ 1.87 billion loan as it seeks to allay investor concerns over its balance sheet, which has been devastated by an unprecedented drop in global travel demand amid the COVID pandemic 19.
The five-year credit facility was underwritten by a syndicate of banks and is backed by a loan program. UK export financing, which includes certain restrictions on future dividend payments, easyJet ESYJY,
said in a declaration Monday.
EasyJet shares fell more than 1% in London on Monday.
European airlines like easyJet, already grappling with the loss of millions of flights since the pandemic began in March, have come under increasing pressure in recent weeks as a number of countries have banned flights from the UK. United over fears of a contagious strain of coronavirus.
Last week, the Irish low-cost carrier Ryanair RYA,
cut its annual traffic forecast by around 5 million passengers and called on the government to step up the pace of vaccine deployment.
The UK has already started administering the vaccine developed by the US pharmaceutical company Pfizer PFE,
and its German partner BioNTech BNTX,
as well as that developed by the Anglo-Swedish pharmaceutical company AstraZeneca AZN,
with the University of Oxford. Moderna biotechnology mRNA on Friday,
COVID-19 vaccine became the third to be authorized for emergency use by the UK regulator.
The government has set a target of vaccinating 14 million of those most at risk by February 15. Health Secretary Matt Hancock said on Sunday that 2 million vaccines had been given so far in the UK, including a third of the elderly. over 80.
To deal with the sudden rise in the new strain of coronavirus, regular rapid tests for people without symptoms of COVID-19 will be available across England from this week, the government said on Monday.
“This critical national infrastructure for testing will be so important that we are relaxing the restrictions, so that we can use the confidence provided by accurate testing to find the virus and help us return to normal life. Hancock said in a declaration.
However, businesses in sectors worst affected by the pandemic, including airlines, hospitality and retail, are likely to remain under pressure until the fall, when the government aims to complete testing on adults. UK
Monday, easyJet ESYJY,
Managing Director Johan Lundgren said the new $ 1.87 billion loan, which was secured against planes, would “significantly” extend and improve easyJet’s debt maturity profile and increase liquidity levels. available.
The carrier, which has now secured more than £ 4.5 billion ($ 6 billion) in cash since the start of the pandemic, has not ruled out taking further action.
“Few industries have been hit so hard during the pandemic as the airline industry and its major players still scramble for months to consolidate their finances so they can weather the turmoil unscathed,” said Russ Mold, chief investment officer. by AJ Bell.
“This [the loan facility] will complement the liquidity the company has raised for itself, through the £ 409million share placement in June, the sale and leaseback of aircraft and new credit facilities and provide it with a margin of additional maneuver while waiting for the passengers to return to the sky, ”he added.
Easyjet’s announcement follows that of British Airways owner International Airlines Group IAG,
which in December obtained a loan of 2 billion pounds also partly subscribed by UK Export Finance. IAG also said this month that it is also looking for other ways to raise more money.
From this week, flights to the UK will require travelers to show proof of a negative COVID test taken within 72 hours of landing.