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INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A.

(IAG)
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International Consolidated Airlines S A : British Airways owner IAG boosts liquidity with 825 mln euro convertible bond

05/11/2021 | 04:47am EDT
FILE PHOTO: British Airways logos are seen on tail fins at Heathrow Airport in west London

* Amount raised from bond will top initial target

* Latest move by IAG to strengthen balance sheet

* Could also provide funds to take advantage of a travel recovery

LONDON, May 11 (Reuters) - British Airways-owner IAG said on Tuesday it would raise 825 million euros ($1 billion) from a convertible bond, the group's latest move to strengthen its balance sheet as travel remains at very low levels during the pandemic.

IAG, which also owns Aer Lingus, Iberia and Vueling, has a weekly cash burn rate of 175 million euros while most of its fleet is grounded due to restrictions, meaning its focus over the past year has been on raising funds.

Forecasting a travel recovery from July, the group said last week that it had liquidity of 10.5 billion euros, helped recently by a new revolving credit facility and the deferral of some pension payments.

On Tuesday, it said its convertible bond issue would boost its liquidity by around 825 million euros. Strong demand for the offering meant it would raise more than the 800 million euros initially targeted for the senior unsecured bonds, which are convertible into IAG shares, and due in 2028.

The group's shares were down 5.6% at 197 pence in afternoon trading, underperforming a 2% decline in London's blue-chip share index.

IAG said the proceeds would strengthen its finances given continued uncertainty around the travel recovery, but could also be used to provide extra resources to take advantage of a recovery in demand.

"This is simply the next move for IAG to continue to bolster liquidity while the crisis drags on," said Bernstein analyst Daniel Roeska.

IAG was left disappointed by Britain's cautious reopening of travel last week, which left its big markets, Spain and the United States, off a list of low-risk destinations.

Announcing the final terms of the bonds, IAG said the bonds would carry a fixed rate of interest of 1.125% payable semi-annually in arrears and the conversion price of the bonds has been set at 3.3694 euros per share, a premium of 45% over the volume weighted average price of the shares in the period from launch to pricing, translated into euros. ($1 = 0.8217 euros) (Reporting by Sarah Young; editing by Paul Sandle and Susan Fenton)


© Reuters 2021
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Financials
Sales 2021 10 353 M 12 268 M 12 268 M
Net income 2021 -2 173 M -2 575 M -2 575 M
Net Debt 2021 12 515 M 14 830 M 14 830 M
P/E ratio 2021 -4,90x
Yield 2021 -
Capitalization 11 470 M 13 601 M 13 591 M
EV / Sales 2021 2,32x
EV / Sales 2022 1,21x
Nbr of Employees 51 846
Free-Float 74,6%
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Mean consensus OUTPERFORM
Number of Analysts 19
Average target price 2,72 €
Last Close Price 2,31 €
Spread / Highest target 51,2%
Spread / Average Target 17,4%
Spread / Lowest Target -12,5%
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Managers and Directors
NameTitle
Luís Gallego Martín Chief Executive Officer & Executive Director
Stephen William Lawrence Gunning Chief Financial Officer
Javier Ferrán Larraz Chairman
John Gibbs Chief Information Officer
Alberto Miguel Terol Esteban Senior Independent Director
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