Jet2’s £422m fundraise puts wind beneath its wings

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Leeds-headquartered leisure travel group, Jet2, has completed a fundraise announced yesterday, raising about £422m.

The fundraise comprised 35,166,654 placing shares and subscriptions for 593,561 retail shares, in each case at a price of 1,180 pence per ordinary share.

Explaining the reasons behind the fundraise, a Jet2 spokesman said the business was having to deal with changing Government guidance and tightening travel restrictions due to the pandemic.

He added: “Since 30 September 2020, the amount of flying that has undertaken has further reduced due to continually changing UK Government travel guidance.

“Turkey was removed from the travel corridor list on 3 October 2020; flights to the Canary Islands recommenced on 30 October 2020 but flying from England was curtailed by the Government on 5 November 2020;  and from 18 January 2021 the Government suspended all air travel corridors.

“The UK Government is continuing to advise against all non-essential travel, with a negative test result required to fly into the UK and five day “test to release” or 10 day quarantine required on return to the UK from foreign travel.

“As a result, the company continues its cautious approach to summer 2021, with seat capacity continually being refined as UK and EU travel guidance evolves.

“ flights are cancelled until 15 April 2021 and are subsequently scheduled to operate with a reduced flying programme.”

Jet2 said its current cash position as of 31 January 2021 comprised “Own Cash” of £479m and Total Cash (inclusive of advance customer deposits) of £772m (unaudited).

Its spokesman added: “Jet2 continues to take every step necessary to preserve cash and enhance liquidity to deal with this most challenging of trading environments and the Group has the ability to continue to take additional liquidity actions if required.”

Commenting after the fundraise result was confirmed, Philip Meeson, executive chairman, said: “The Board is grateful to both existing shareholders and new investors for their significant support of this equity issue.

“Based on the indicative scenario planning undertaken by management, the Board believes the proceeds will provide sufficient liquidity on an extended and likely unpredictable shutdown basis to deal with this continually challenging trading environment.  

“Furthermore, the directors believe the fundraise will enable management to continue to adopt a decisive, but prudent, responsible financial management approach; take longer-term strategic decisions to support sustainable long term profit growth; and improve the ability for Jet2 to exit the pandemic in a stable commercial position so it is well positioned to capitalise on the upturn opportunity when it arrives.

“The Board remains of the belief that once able to do so, our customers will be determined to enjoy the wonderful experience of a well-deserved Jet2 holiday and that and Jet2holidays will continue to have a thriving future.”

Jet2 said the fundraise was significantly oversubscribed and that the shares issued represent 20% of the existing issued ordinary share capital of Jet2 immediately prior to the fundraise.

Canaccord Genuity and Jefferies acted as joint global co-ordinators, joint bookrunners and joint brokers in connection with the share placing. Cenkos Securities acted as nominated adviser to the company.