Rolls-Royce ‘reviewing funding options’ as share price slumps again
Rolls-Royce, the Derby-based manufacturing giant, says it is “reviewing a range of funding options” after it reported huge six-month losses.
The company made a hefty reported loss of £5.4bn in the first six months of the year, after the Covid-19 pandemic demolished the passenger flight sector.
The firm also saw revenues drop by a quarter to £5.8bn during a time which boss Warren East said had “an unprecedented impact” on the civil aviation sector, with fights grounded across the globe.
Rolls said that it has saved £350m in the first half of the year, against a target of £1bn in cuts by the end of 2020, and that over 4,000 jobs have been cut this year so far, with another 5,000 to go before Christmas. The company has taken out a £2bn loan to see it through the rest of the the year.
However, the company has now said it may look to raise even more cash.
In a statement, Rolls-Royce said: “We continue to review a range of funding options to further strengthen our balance sheet. These could include debt and equity but no final decisions have been taken.
“We have already taken swift action to strengthen our liquidity with £6.1bn at the end of the first half of the year and a further £2bn term loan agreed in the second half. We have also announced £1bn of cost mitigation activity in 2020 and launched a reorganisation of our Civil Aerospace business to save £1.3bn annually. We have also identified a number of potential disposals that are expected to generate proceeds of more than £2bn over the next 18 months, including ITP Aero.
“A further announcement will be made if and when appropriate.”
The statement comes as Rolls-Royce’s share price remains in the doldrums. On trading yesterday, it closed at 192.35p – down almost 5.4%.