Jet2 sells shares to raise £422m for ‘sufficient liquidity’

Leeds-based Jet2 plc said on Friday it raised £422 million by selling almost 36 million new shares in the firm to “provide sufficient liquidity on an extended and likely unpredictable shutdown basis to deal with this continually challenging trading environment.”

The company’s share price fell about 7% on the news.

In a stock exchange statement, Jet 2 said: “The company has raised total gross proceeds of approximately £422 million through the fundraise, comprising 35,166,654 placing shares and subscriptions for 593,561 retail shares, in each case at a price of 1180 pence per ordinary share, representing a discount of approximately 9.1 per cent. to the closing price on 11 February 2021 (being the last practicable date prior to the publication of this announcement).

“The fundraise was significantly oversubscribed.

“The fundraise shares being issued represent 20 per cent. of the existing issued ordinary share capital of Jet2 immediately prior to the fundraise.

“The company consulted with a number of its major shareholders prior to the fundraise in order to adhere to the principles of pre-emption as far as possible through the allocation process and is pleased by the strong support it has received from existing shareholders and new investors.

“Canaccord Genuity and Jefferies acted as joint global co-ordinators, joint bookrunners and joint brokers in connection with the placing.

“Cenkos Securities plc acted as nominated adviser to the company.”

Russ Mould, investment director at Salford investment firm AJ Bell, said: “While those taking part in the Jet2 share placing got the stock in a 9%-off sale, there is still a leap of faith in backing a business whose near-term prospects are clouded by uncertainty caused by travel restrictions.”

Jet2 executive chairman Philip Meeson 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 that 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 that 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, taking millions of UK holidaymakers annually to the Mediterranean, the Canary Islands and to European Leisure Cities.”