British Airways in £600m fundraising plan to see it through downturn

| July 17, 2009 | 0 Comments

British Airways (BA), which recently admitted was fighting for its survival, has today announced plans to raise £600 million.

In May, the airline reported a pre-tax loss of £401 million for the 12 months to the end of March, compared with profits of £922 million the previous year. The loss represented the biggest since the company was privatised in 1987.

Last month, BA asked 40,000 members of staff to work for nothing in a bid to cut costs. The group’s chief executive, Willie Walsh, has already confirmed he will work for nothing this month - giving up his monthly salary of more than £60,000.

In the meantime, the airline is predicting losses of around £100 million in the three months to the end of June.

In an attempt to see it through the economic turmoil, BA will issue £300 million in convertible bonds to existing shareholders, subject to approval from the company’s shareholders at a general meeting.

“Following discussions with institutional investors, we’re taking action to improve our liquidity and strengthen our position within the industry,” BA chief executive Willie Walsh said.

“This goes hand-in-hand with our cost reduction and efficiency initiatives which are designed to create the right conditions for our sustainable, long term profitability,” added Walsh.

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