Auckland International Airport <AIA.NZ> said on Monday it would raise up to NZ$1.2 billion ($704.5 million), mostly through a discounted share placement, to shore up its balance sheet and help it ride out a coronavirus-fuelled hit to the travel industry.
The equity increase includes a NZ$1 billion fully underwritten share placement at a floor price of NZ$4.50 per share, a 10.7% discount to the stock's close on Friday, and a NZ$200 million share purchase plan.
The cash call comes as the travel and tourism sector has been ravaged by the pandemic, which has led to lockdowns across countries and regions and forced companies to slash costs amid severely crimped demand.
"The outbreak of COVID-19 has changed travel and trade markets virtually overnight, and like many organisations, our business has been materially impacted ... we need to act now to secure our future," Board Chair Patrick Strange said.
Last month, the airport operator scrapped its interim dividend and said its chief executive officer would take a 20% cut in salary along with other cost-cutting measures, including a hiring freeze and a halt to discretionary spending.
The company also said on Monday it had secured covenant waivers from its lenders and extended all its bank facilities due to mature before Dec. 31, 2021.
It expects capital expenditure of about NZ$275 million between April 2020 and December 2021.
(Reporting by Shashwat Awasthi in Bengaluru; Editing by Peter Cooney)
