Finnair is one daunting rights issue that can fly
12:35 06/10/2023
FINNAIR OYJ
0,3888 -0,13 -25,66%
(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)
LONDON, Oct 6 (Reuters Breakingviews) - Rights issues worth almost the value of a company’s equity rarely get off the ground. Tell that to 700 million euro Finnair , which on Friday unveiled a 600 million euro rights issue. Various factors should still allow it to fly.
For one thing, the Finnish state owns over half of the Nordic airline and is supporting the rights issue. The government is offsetting the cost of the cash call by being partly refunded a 400 million euro capital loan it granted to the airline in the wake of the pandemic. After falling 70% in 2020, the carrier’s revenue is forecast to return to pre-pandemic levels in 2024 and it’s expected to book a net profit this year, LSEG data shows. But slashing financing costs makes it more likely it can restart dividends, absent since before Covid-19, by 2025.
Finnair’s other shareholders may not enjoy coughing up for an entity still in recovery mode – its shares slumped 25% on Friday. The knowledge that investors in fellow Scandi airline SAS have been all but wiped out in a new restructuring may limit their annoyance. (By Aimee Donnellan)
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Finnair’s other shareholders may not enjoy coughing up for an entity still in recovery mode – its shares slumped 25% on Friday. The knowledge that investors in fellow Scandi airline SAS have been all but wiped out in a new restructuring