Qantas capital raising to accelerate recovery plan

QANTAS Airways shares tumbled yesterday after a trading halt was lifted following the airline’s announcement of major cuts to jobs and other costs.

The resumption of trade in Qantas shares came as it completed the first stage of its capital raising program – a $1.36 billion institutional placement of 372.7 million shares at $3.65 a share.

In a statement, Qantas said it had received high levels of interest from existing institutional shareholders and new investors with demand to participate in the placement “significantly in excess of the funds Qantas had sought to raise”.

Priority went to eligible existing institutional shareholders, who accounted for 94 per cent of the placement, the statement said.

The news came as administrators of Qantas rival Virgin Australia announced Bain Capital as the successful bidder for the airline following the dramatic withdrawal of Cyrus earlier yesterday.

Qantas Group CEO Alan Joyce said proceeds from the equity raising would be used to accelerate the airline’s recovery from the COVID-19 crisis that had devastated the aviation industry worldwide.

“The fact there was significant demand for this offer shows clear support for our recovery plan and confidence in the fundamentals of this business,” Mr Joyce said.

As well as reducing costs by $15 billion in three years, the Qantas Group will farewell 6000 workers from its 29,000strong workforce and aim to stand up another 15,000 employees by 2023.