Australia's Flight Centre to raise A$700m to offset coronavirus hit

[BENGALURU] Australia's Flight Centre Travel Group on Monday said it was looking to raise about A$700 million (S$605.4 million) and that cost-cutting would save roughly A$1.9 billion, as the travel industry is battered by the coronavirus outbreak.

The sector has been among those hardest hit by the virus which has forced lockdowns across countries and regions and severely crimped demand, leading several companies to announce cash calls, layoff or furlough staff, slash wages and suspend earnings guidance.

The travel agency said its cash call will include a share placement to raise about A$282 million at an offer price of A$7.20 per share, a 27.3 per cent discount to the stock's close on Friday.

The capital raise will also include a 1-for-1.74 accelerated pro rata non-renounceable entitlement offer for about A$419 million.

The company, which last month put 6,000 employees - almost a third of its workforce - on leave and warned some staff may be laid off, said its annualised operating expenses would fall to about A$65 million a month by the end of July.

It previously withdrew its 2020 forecast, announced that executives would take pay cuts, and on Monday said its lenders had committed a further A$200 million to shore up liquidity needs.

REUTERS