Leeds-based Jet2 plc announced on Wednesday the signing of a new £150 million term loan and the launch of an offering of £375 million of guaranteed senior unsecured unrated convertible bonds due 2026.

“Having taken decisive action over the past year, by raising close to £1.0 billion in liquidity from a diversified range of funding sources … our liquidity position is strong, with the group’s cash position as at 31 March 2021 comprising unaudited total cash of £1,379 million and ‘own cash’ (excluding advance customer deposits) of £1,062 million (2020: £520 million), an increase of 104% on the prior year end,” said Jet2 in a stock exchange statement.

“This is ahead of the scenarios outlined at the time of the recent placing in early February 2021.

“As announced in April, the company intends to recommence its flying operations on 24 June 2021.

“Unsurprisingly, current customer booking trends for Summer 2021 reflect the availability of truly accessible, UK Government approved destinations.

“However, given the continued short-term uncertainty, we remain encouraged by the volume of customer bookings to date for both Winter 2021/22 and for Summer 2022, for which package holiday bookings are displaying a materially higher mix of the total.

“Based on this limited visibility, we are confident that once normality returns, our customers will be determined to enjoy the wonderful experience of a well-deserved Jet2 holiday and that Jet2.com 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.

“The offering aims to complement Jet2’s existing capital structure and takes advantage of the current financing environment through the issuance of the convertible bonds.

“The proceeds of the issuance of the convertible bonds will be used to strengthen Jet2’s balance sheet further and position the company for a strong recovery as lockdown restrictions are lifted, through fleet growth and fleet renewal opportunities.

“In addition to the convertible bonds and the company’s existing revolving credit facility, Jet2 has also signed a new unsecured £150 million term loan maturing in September 2023 as further liquidity to enhance balance sheet capability and flexibility.

“These transactions together, further improve the ability for Jet2.com and Jet2holidays to capitalise on any upturn opportunities, benefiting all stakeholders, including shareholders.

“The ordinary shares underlying the convertible bonds represent approximately 9.99% of the company’s existing ordinary share capital immediately prior to the offering and as a result, the board has consulted with the company’s major shareholders, ahead of the release of this announcement, who have endorsed this strategy.”

Jet2 added: “The convertible bonds will be issued in principal amounts of £100,000 each and are expected to carry a coupon of between 1.375% and 1.875% per annum payable semi-annually in arrear in equal instalments on 10 June and 10 December in each year, with the first interest payment date being 10 December 2021.

“The convertible bonds will be convertible into new and/or existing ordinary shares of the company.

“The initial conversion price is expected to be set at a premium between 35% and 40% above the reference share price which will be equal to the placement price of an ordinary share in the Concurrent Delta Placement …

“The conversion price will be subject to adjustment in certain circumstances in line with market practice.

“The Term Loan described above is conditional on the issuance of the Convertible Bonds …”