Capital raising to strengthen Flight Centre’s liquidity and “position it for further growth”.
Flight Centre has just announced a $700 million fully underwritten equity capital raising, along with increased credit lines which will help it overcome the “unprecedented travel and trading restrictions imposed by governments in response to the COVID-19 pandemic”.
The company has also confirmed that previously announced cost control initiatives and cash preservation initiatives will reduce its annualised operating expenses by about $1.9 billion, to about $65 million per month, bu the end of July.
Flight Centre will close more than 50% of its leisure shops across the world, including more than 40% of its stores in Australia, is exploring the sale of its Melbourne office, and aims to reduce occupancy costs of its remaining retail network by renegotiating rental agreements with landlords.
“The combination of these initiatives is expected to ensure Flight Centre can trade through an extended period of uncertainty and disruption, can continue to deliver high quality travel services to customers, and can capitalise on opportunities as market conditions improve,” an ASX announcement noted.
More details in today’s issue of Travel Daily.