As expected, Flight Centre Travel Group (FCTG) has confirmed that its offering of senior unsecured convertible notes worth $400 million has been settled.
The net proceeds from the offering are expected to be approximately A$392 million, after deduction of commissions, professional fees and other administrative expenses.
FCTG intends to use the net proceeds from the offering to repay $100 million of the company’s existing debt, with the remaining proceeds applied to further strengthen its liquidity position.
In announcing the offering of notes last week, FCTG supremo Graham “Skroo” Turner said it would “substantially enhance our funding position with longer tenor, extended covenant relief and greater liquidity”.
“While trading conditions continue to improve, we continue to reduce our cost base and we remain prepared for almost all scenarios including a prolonged downturn,” he said.
“We are seeing gradual improvement in revenue trends, albeit from a modest level and, importantly, we continue to win key customers in our corporate business notwithstanding the difficult conditions.
“The recent easing of lockdown restrictions in Australia, our largest market, gives us confidence of further improvement in the near term.
“While we remain cautious given the environment in the Northern Hemisphere, we welcome the recent news of Pfizer’s positive COVID-19 vaccination trial data and look forward to further developments, given their potential to fast-track the recovery in travel activity.”
FCTG will no doubt gain further confidence from Moderna’s coronavirus vaccine progress, the US drug company recently releasing data that showed it is 94.5 per cent effective.
Earlier this month, Turner spoke candidly about the tough business decisions that FCTG has been forced to make during the pandemic at Travel DAZE 2020, including redundancies, retail store closures, the sale of the company’s Melbourne office and the closure of multiple brands.
Turner also outlined the company’s recovery timeline to attendees of the virtual event, as well as tackling questions about FCTG’s handling of refunds, international travel, the future of agents, and lessons he’s learned during the pandemic.
You can watch his Travel DAZE session in full, on demand below: