Qantas launches US$1.3billion placement and axes 6,000 jobs
AUSTRALIA's Qantas Airways has launched an AUD1
AUSTRALIA's Qantas Airways has launched an AUD1.9 billion (US$1.3 billion) institutional placement and unveiled its three-year post-COVID recovery plan, which will see 6000 jobs cut and 100 aircraft grounded for the next 12 months.
The deal was launched last Thursday with the help of investment banks Macquarie and JPMorgan. Luminis Partners was also on hand as an adviser. Funds were told the fresh capital would be used to accelerate Qantas' coronavirus recovery, as well as for balance sheet strengthening.
The cuts announced account for 20 per cent of Qantas' total workforce of 29,000 people, according to the company. They will primarily affect the airline's corporate, ground and flight staff, while another 15,000 workers will remain on furlough 'until flying returns,' it added. Jetstar, the company's budget carrier, will also be affected.
The airline would also retire six of its 747 planes six months earlier than scheduled and up to 100 aircraft would be grounded for up to 12 months, if not longer.
Qantas expected most of its aircraft would eventually go back into service but flagged that some of its leased aircraft could be returned.
Like all airlines, Qantas has been on equity raising watchlists since the pandemic struck but up until Thursday had resisted calls to make a trip to equity capital markets. It raised $550 million debt in May and $1.05 billion in March to shore up its cash position.
When Thursday's share purchase plan and placement were finished, Qantas would have pro forma liquidity of $4.6 billion, with $3.6 billion in cash and $1 billion of undrawn facilities, reports Australia's Financial Review.