Qantas ticks off part one of $1.9 billion equity raising

The Qantas Group is well on its way to achieving its planned $1.9 billion equity raising with the completion of a fully underwritten institutional share placement worth around $1.4 billion.

The placement saw 372.7 million new shares go to institutional investors at a price of $3.65 per share – a 12.9 per cent discount to the previous traded price of $4.19 on 24 June.

Qantas noted that the placement represented a 25 per cent increase to total shares on issue, which itself has declined by more than a third through share buybacks in recent years.

Approximately 94 per cent of the placement shares were allocated to existing shareholders.

According to Qantas, the placement received high levels of interest from both existing institutional shareholders and new investors, with demand to participate “significantly in excess” of the funds that the company sought to raise.

Qantas Group CEO Alan Joyce said: “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.

“The plan involves some difficult decisions, but we are extremely well-positioned to get through this crisis and start growing again on the other side.”

The share placement is the first part in Qantas’ $1.9 billion equity raising effort, with the group allowing eligible existing shareholders to participate in a non-underwritten share purchase plan of up to $500 million.

Qantas expects to despatch a booklet with further details on the share purchase plan to eligible shareholders on Thursday.

In announcing its post-coronavirus recovery plan last week, Qantas said proceeds from the equity raising will be used to accelerate the group’s recovery, strengthen its balance sheet and position it to capitalise on opportunities aligned with its strategy.

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