Airline Qantas (ASX: QAN) has successfully completed the $1.4 billion placement tranche of its broader capital raise this morning.
The company says it received high levels of interest from both existing institutional shareholders and new investors, with demand to participate in the placement "significantly in excess of the funds that Qantas sought to raise".
The $1.4 billion placement is the first part of Qantas' $1.9 billion capital raise, announced yesterday, to fund the group's three-year COVID-19 recovery plan.
In addition to the capital raise Qantas' recovery program includes making 6,000 staff redundant, grounding 100 aircraft for at least a year, and immediately retiring Qantas' six remaining 747s.
Approximately 372.7 million new shares were issued under the fully underwritten placement at a price of $3.65 per share, with 94 per cent of the shares allocated to existing shareholders.
"The fact that there was significant demand for this offer shows clear support for our recovery plan and confidence in the fundamentals of this business," says Qantas CEO Alan Joyce.
"The plan involves some difficult decisions, but we are extremely well positioned to get through this crisis and start growing once again on the other side."
The placement shares, once issued, will represent a 25 per cent increase to total shares on issue.
The airline will also conduct a share purchase plan worth up to $500 million.
Following the placement the company's available liquidity is expected to be $4.6 billion, including a $1 billion undrawn facility.
Business News Australia
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