Flight Centre stumbles after stunning return

SHARES in Queensland’s Flight Centre Travel Group closed slightly higher yesterday after a staggering return to trading in the morning.

Its early gains of 10 per cent were washed away after lunch before shares closed 0.8 per cent higher at $9.99.

Flight Centre staged a stunning return to trading, with shares in the embattled holiday giant jumping 10 per cent after a three-week hiatus.

Its increase comes after the group announced on Monday it would issue 97 million new shares as part of a $700 million capital-raising initiative to strengthen its balance sheet and keep the company afloat through the coronavirus pandemic.

Flight Centre yesterday revealed $582 million had been raised through the share placement program and the company had resumed trading.

“We are extremely pleased and appreciative of the support we have received from both existing shareholders and new investors,” Flight Centre managing director Graham Turner said. “The suite of initiatives announced yesterday, including the equity raising, will enable Flight Centre to trade through this period of disruption to the global travel industry, while continuing to deliver exceptional service to our corporate and leisure customers.”

Another $138 million is expected to be raised through a retail entitlement offer, which will open on April 15.

Shares in the company gradually fell from a high of $40.20 on January 15 to $35.54 on February 21, before plunging to a low of $8.92 on March 19 when trading was suspended.

Flight Centre has cancelled its dividend and executives have also taken a pay cut amid the crisis.