EasyJet ‘may need to raise £1bn cash’ through a rights issue
- Analyst Mark Manduca says it may have to raise between £700m and £1bn
- Manduca warned that several things ‘could worsen this outcome’
A top City airline analyst has told investors that easyJet may have to raise up to £1billion through a rights issue.
Last week, Mark Manduca, of investment bank Citigroup, told institutional clients there was a ‘high’ probability that easyJet would have to tap investors for money by issuing shares in the next few months.
He said it was likely that easyJet would have to raise between £700million and £1billion.
Analyst Mark Manduca says easyJet may have to raise between £700m and £1bn
Although fund managers expect easyJet to raise fresh equity, Manduca warned that several things ‘could worsen this outcome’.
They include a second wave of coronavirus cases in the winter, a probable price war, and Sir Stelios Haji-Ioannou, easyJet’s founder and largest shareholder, deciding against supporting a rights issue by not taking up his share allocation.
Sir Stelios has fallen out with the firm’s chairman and chief executive, and has threatened that if easyJet does not cancel a £4.5billion order from Airbus, he will not support a capital raising.